The market forecast for state and local government spending on information technology is partly sunny, said Ray Bjorklund, senior vice president and chief knowledge officer of FedSources, a consulting firm based in Washington, D.C., that provides government market intelligence.
Factors that will tend to accelerate state and local IT spending in the next year to 18 months, he said, include state budget surpluses, population growth, an increased demand for governmental services, pent-up demand for modernization of Medicaid management, IT consolidation and demand for electronic health records.
Among the factors that could slow IT spending are an inflation-hampered economy that curbs state and local revenue, rising unemployment, stagnant business growth, fewer federal funds for state and local initiatives, rising costs for energy and entitlements and the evolution of homeland security into an unfunded mandate.
“Things have gotten a lot better in the state and local markets,” Bjorklund said today at FedSource’s annual State of the States Briefing, "but there are dark and looming clouds in the economy.”
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