Deltek Sr. Analyst Chris Cotner reports.
Previous Deltek analyses and projections have demonstrated several key points with regard to state budgets. First, from FY 2009-2011, state budgets (all-funds, overall budgets) increased at an abnormal rate. Second, FY 2012 is the first projected overall state budget loss since Deltek began tracking in FY 1987. Third, and most promising for the business community, all indicators show that bloodletting should stop for overall budgets in FY 2013, with funds flattening and then beginning an upward trend.
With this in mind, the picture of overall all-state IT budgets becomes clearer. Importantly, actual IT budgets for FY 2012 show an increase of 3.32 percent. To be succinct, this is fantastic news for the IT vending community currently struggling with the economy (subscribers have access to a detailed data table, here). However, IT budget projections for FY 2013 indicate an overall loss of -2.98 percent. While admittedly not the best news for the overall projected recovery, this is really considered a minor bump in the road. It is likely that IT projects remained funded, with cuts lagging somewhat behind the overall FY 2012 cuts for most states. So, some projects may have been cut in 2013 as a way to offset other cuts from 2012 (creative state budget math). However, looking further forward, the projections are more positive, with an indicated overall growth rate of 8.37 percent for 2014 and an average 4.60 percent annual growth rate from FY 2013 to FY 2020 (subscribers detailed table, here and figure 1, below).
For the complete blog, go here.