GovTech Market Insights: June 2021

State Budgets Rebound

According to data from the Urban Institute, 29 states have experienced a recovery in their tax revenues, taking in as much or more revenue in the 12 months since the pandemic began as they did in the 12 months before the pandemic. On the heels of three large federal aid packages, states are now on a much more stable financial footing which is showing some states projecting 10%+ budget growth. Here are some highlights from the report:

• States with the largest gains from prior year collections: Idaho (11%), Utah (8.7%), Colorado (8.0%), South Carolina (7.7%), and South Dakota (7.2%).
• States where losses (largest loss) still exceeded gains: Alaska (-49.2%), Hawaii (-17.4%), North Dakota (-10.9%), and Texas (-10.3%).

States Projecting Budget Growth/Loss

States will look to the $195 billion in fiscal recovery funds from the American Rescue Plan Act to further bolster their budgets and make strategic investments in broadband, cybersecurity and technology modernization aimed at ensuring the delivery of public services. Looking closer at the federal relief funds, here are four things to keep in mind:

• Government leaders will have competing priorities, so it’s important for industry to help them think strategically. These are one-time funds that can have an impact.
• Government buyers will be mindful of the “funding cliff” and sensitive to on-going costs.
• Thoughtful investments in technology — including cybersecurity and broadband — will help government better serve constituents now and reduce costs long-term.
• Organizations will look to make an immediate impact by investing in solutions that deliver long-term benefits.

NEWS IN NUMBERS:

$765 million
The amount of venture capital U.S. gov tech companies have raised to date in 2021. To put that in perspective, last year, gov tech companies in the U.S. raised just $280 million in venture capital. This exponential growth reveals that the gov tech market is not slowing down!

TOP STORIES YOU SHOULD READ:

Creating Federal Cybersecurity Standards Will Not Be Easy
Recent high-profile cyber attacks against prominent U.S. companies have packed a charge behind efforts to craft more meaningful federal cyber policy. Experts, however, say this is easier said than done.

What’s New in Civic Tech: Meet the 50 Mayors Challenging Cities
Plus, Philadelphia launches new cross-sector household Internet assessment survey, Ohio has built a distracted driving dashboard, and Los Angeles is working to help young people impacted by the digital divide.

Antitrust Bills Could Mean Massive Changes for Big Tech
Proposals in the House, along with the separate legislation introduced in the Senate, would lead to the biggest reform of competition laws in the U.S. since the first antitrust rules were passed in the late 19th century.

Cities Say Infrastructure Is Top Priority in 2021
Housing and crime round out top urban concerns and mayors are scrambling to use much-needed federal funding as austerity issues recede, according to the latest State of the Cities report from the National League of Cities.

NEW RESOURCES

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State of GovTech
The gov tech market has experienced rapid growth and acceleration driven by a perfect storm of market dynamics. Last week, e.Republic and CivStart held a new virtual event that brought together governments, industry leaders, investors and entrepreneurs to better understand what opportunities lie ahead in 2021. Click here to watch on demand.

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