Forecast grim for state budgets
- By Eric Kulisch
- Dec 18, 2000
National Governors' Association
New budget forecasts showing a decline in fiscal health for state governments
could force them to rein in ambitious spending plans for information technology
and e-government projects.
A moderate slowdown in revenue and escalating health care costs are the
prime forces behind the budget tightening, according to a report released
Monday by the National Governors' Association and the National Association
of State Budget Officers. The impact will be most visible in fiscal 2002
and 2003 budgets, the report states.
"This is a warning sign that some clouds are out there we haven't seen in
awhile," said Stacey Mazer, NASBO's acting director. Her organization will
have a better fix on current-year conditions when it issues its next report
The report, "The Fiscal Survey of States," has been published twice a year
since 1977 and for the first time includes data on IT spending. Thirty states
provided figures indicating average IT expenditures of $185 million annually.
Texas, which is set to spend $679 million this year, leads the nation by
a wide margin in IT funding each year.
The fiscal downturn may not halt the overall momentum toward automation
and online services, "but if it is a large capital investment, it is conceivable
it will be delayed somewhat," NGA executive director Ray Scheppach said.
He predicted that states will cut more spending rather than raise taxes
to cope with the changed fiscal environment.