On a practical level, industries will see states mirroring some federal legislation. Local government and educational organizations, meanwhile, will take their lead from state legislation — particularly in the ways by which artificial intelligence will be used ethically and how data will be protected.
The numbers for technology spending are significant. Of the $138.9 billion budgeted across SLED for 2024, IT services makes up $59 billion. Software products represent $13 billion, and by 2025 those numbers are expected to increase to $61 billion for services and $14 billion for software products.
Let’s break down what is predicted to dominate the budget discussion this year for key players at each level across SLED. (This information was gleaned from an analysis of publicly available budget information from government agency websites, private, subscription-based organizations that track government spending, as well as other open source material.)
CYBERSECURITY TOPS OVERALL STATE PRIORITIES
In October 2023, the National Association of State Chief Information Officers (NASCIO) published findings from 49 state CIOs on a range of IT issues. Not surprisingly, cybersecurity has remained the top priority for state CIOs for 10 consecutive years. States continue to emphasize cybersecurity fundamentals and NIST framework adoption.
According to the NASCIO report, ransomware remains the top cyber risk. To combat this continuing problem, 53 percent of states have cybersecurity insurance; 33 percent are self-insured for cyber risks. Foreign tech bans have been imposed by 80 percent of states.
From an emerging technology perspective, generative AI topped the charts of important innovation. Approximately 53 percent of state CIOs believe it to be the most significant technology, selecting it as their top choice. AI is generally expected to innovate business processes, such as citizen services, cybersecurity operations and fraud detection/prevention. State CIOs underscored the need for tailored policies to ensure responsible use.
Cloud services will also be top of mind at the state level, particularly the migration of services. Many services have already been migrated to the cloud or are included in plans to do so. The most substantially completed migration of services to the cloud include email/calendar services, collaboration platforms and project/portfolio management.
Now let’s take a brief look at some of the budgets at the SLED level.
STATE-LEVEL IT BUDGET HIGHLIGHTS
California. California’s IT budget for 2024 is $13 billion. The state’s top IT investments include $198 million for modernization to its Employment Development Department, $126.6 million for COVID-19 response and $93 million for REAL ID.
The IT strategic priority for California is delivery of easy-to-use, fast, dependable and secure public services. This requires reliable analytics, improved data infrastructure/shared data governance across agencies, enhanced user experience for online services, and improved identity verification and authentication.
New York. New York’s $5.4 billion IT budget includes $391 million for centralized technology services, $50 million for data analytics and $30 million for technology financing. The state’s strategic priorities include digitizing services, enhancing its cyber posture and creating a “One ID” system for residents to access services across all agencies. New York is particularly committed to fostering a whole-of-state approach to cybersecurity.
Texas. Of its $5.4 billion IT budget, Texas’ top IT investments include $323 million for IT oversight and program support, along with $270 million for data center and shared technology services, and $53 million to promote efficient security. The state’s strategic priorities include an elevated government experience, as well as enhancing data management practices to bolster analytical decision-making and to protect Texans’ private information.
CITY-LEVEL IT BUDGET HIGHLIGHTS
District of Columbia. The nation’s capital has a 2024 IT budget of $369 million, of which $17.5 million will be directed to updating its traffic ticket processing system and $3.5 million to the P-20W data system to measure and utilize information on student college and career readiness and outcomes. D.C.’s IT strategic priorities, as with most other SLED organizations, include improving user-centric digital experiences, IT operations, and infrastructure and cybersecurity risk.
San Francisco. The city’s $291 million budget will earmark $26 million for major IT projects, $10 million to improving data access, and $6 million for security consulting and design services. San Francisco’s strategic goals include prioritizing service accessibility, redesigning operations and introducing innovative services for government modernization.
Philadelphia. Of its $270 million IT budget, Philadelphia plans to invest $11 million in records digitization and storage, $8 million in upgrading cloud solutions, and another $8 million in data systems for essential services support. The city’s priorities include transformation recreation centers to broadband anchor institutions, updating fire department IT and developing citywide electric vehicle charging.
Chicago. The Second City’s $240 million IT budget will see top investments including $50 million on computer hardware, software, peripherals, cloud and related maintenance and installation services. Some $15 million will be directed to water management customer service billing and information system support. Chicago’s IT priorities include people-first digital services, securing cities and assets, and creating a data-driven city.
EDUCATION IT BUDGET HIGHLIGHTS
University of Michigan – Ann Arbor. The university’s IT budget is $523 million. Its FY2024 budget included a 5 percent increase to base operating appropriations, as well as one-time resources for infrastructure, technology, equipment and maintenance. Some $70 million will be directed at enhanced enterprise IT security, increased support for data visualization software and stronger IT support for the research enterprise.
University of California – Los Angeles. UCLA’s $422 million IT budget is aimed at infrastructure solutions such as modernizing telephony services to improve voice services and eliminate costly hardware equipment. The university will also focus on application modernization to replace its aging mainframe-based financial aid system, among other modernization activities.
Chicago Public Schools. With $169 million in its IT budget, the Chicago Public Schools system is directing $20 million to technology wiring/cabling and voice network maintenance and support. Another $20 million is allocated to upgrading or replacing its existing ERP system, with $10 million going to firewall replacement and related services.
It will be fascinating to see how closely SLED budgeting will map to spending realities as we move through 2024. In the meantime, it’s clear that priorities at each level will mirror the others as SLED moves to a fully whole-of-state IT philosophy.
Benjamin Harris is a market intelligence manager focused on state, local and education for immixGroup, the public-sector business of Arrow Electronics. immixGroup delivers mission-driven results through innovative technology solutions for public-sector IT. Visit www.immixgroup.com for more information.
