Deltek Sr. Analyst Chris Cotner reports.
With shaky financials negatively impacting state coffers, the debate on public social services provision is as hot as ever. One of the main drivers behind the discussion is the massive baby-boomer generation entering retirement. Since the recession, an additional qualifier has been the increased number of unemployment and underemployment on the social services (SS) rolls. As many governors delivered news of reduced state budgets for FY 2011 and 2012 during their state-of-the-state addresses this year, they also discussed reducing social services spending. However, such talk was almost always tempered with pledges of protecting services to the “most vulnerable among us.” Nevertheless, delivering the same social services more efficiently is an increasingly important part of the discussion in today’s state budgetary climate. Government budget efficiency talk is almost always good news for the IT vendor community.
In all states combined, SS budgets will account for 9.8 percent of all-funds expenditures in FY 2012. While this is a net loss of -1.39 percent from FY 2011, this is still the third largest budget expenditure for the states (behind health care and education). In the recent environment of decreased state revenues in a sluggish economy, budget cuts have been the norm. As I wrote in a previous article (here), FY 2012 is the first time in decades that state budgets have decreased on the whole.
As part of our continued analysis of state and local budgets and spending, Deltek developed a set of statistical projection models to examine future trends in the states’ SS budgets. What we found was more good news. After the net loss in FY 2012 for all states combined, SS budgets are projected to increase (see Figure 1, below) in FY 2013.The following analysis explains both the methodology and projections in greater detail. This analysis also includes SS budgets, budget projections, IT budgets, and IT projects for individual states.
For the complete blog, go here.