Input sees rebound in state, local IT spending

State and Local IT Market Forecast

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After years of cuts in information technology budgets, state and local government spending on IT is expected to start rising this year and hit $64 billion by fiscal 2009, according to an analysis released today.

Local government budgets have been down across the board because of economic pressures, but between fiscal 2004 and 2009 IT spending should grow from $46 billion to more than $64 billion, according to the State and Local IT Market Forecast from Reston, Va.-based research firm Input.

Recovery of the economy and changes in local tax structures will account for much of the increase, but professional services outsourcing, communications and networks and software purchases are expected to be the areas of the greatest growth, said James Krouse, manager of state and local IT market analysis at Input, in a statement.

"The increasing political receptivity of outsourcing has enabled government officials to move processes outside and to focus on core competencies in government administration," Krouse said. "Communications and network spending will also remain strong given the increased necessity for interoperable homeland security and citizen-centric programs like e-government."

On the other hand, spending on hardware and maintenance of legacy systems is likely to either remain flat or even decrease, according to the analysis.

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