GovTech Market Insights: September 2020
Welcome to the September GovTech Market Insights. This month’s edition includes the impacts of COVID-19 on state budgets and a look at the top digital counties in 2020.
Joe Morris
Vice President of Research
e.Republic
FEATURED STORY:
New Reports from the Budget Officers
The National Association of State Budget Officers released a series of reports that shed light on the impact of COVID-19 on state budgets. Clearly, COVID-19 and the corresponding economic shutdowns are challenging budgets, and reserves are not enough to weather the storm. Here are key findings and some thoughts on what this might mean:
- Governors are recommending budget reductions as large as 20 percent through 2022
Difficult decisions related to projects, initiatives and programs are on the horizon. We expect CIOs and department leaders to turn their attention to cost optimization, cost reduction, and creative funding strategies to continue to deliver mission-critical projects. - Federal stimulus will end
Federal stimulus measures like the CARES Act will end, and leaders will become more mindful of how they support their needs, projects, and initiatives without federal funds. The funding cliff is real, and while states and localities may need ongoing funding from the federal government, it doesn’t appear to be coming anytime soon. The funding cliff will also drive leaders to look for sustainable approaches to support their endeavors. - General funds have been hit hard
The report shows year-over-year declines in state general funds for Fiscal 2020 compared to 2019. The general fund is the primary state funding source for ongoing state government expenses, including technology. Many IT organizations are primarily funded through or bill against the general fund.
KEEP IN MIND! Even though budgets are tight, states and local governments are relying on technology like never before. Besides solving some of their toughest challenges, it helps them navigate fiscal constraints.
NEWS IN NUMBERS:
$555 Billion
The cumulative amount of state budget shortfalls expected from COVID-19’s economic fallout over state fiscal years 2020–2022.
State 2021 Budgets and COVID-19 Impact
Total state budget shortfall in each fiscal year, in billions
TOP STORIES YOU SHOULD READ:
Digital Counties 2020: Winners Were Ready Ahead of Pandemic
In the 18th annual Digital Counties Survey, leading jurisdictions had made investments in broadband, remote collaboration and digital citizen engagement long before COVID-19 tested whether they were up to the challenge.
Accela, OpenCities Partner on No-Code Digital Services Tool
In the age of COVID-19, two gov tech firms have partnered on a new software product to meet growing demands for digital services that are user-friendly, quick to stand up and easy to maintain.
The Pandemic and Satellite Internet’s Encore Performance
It may not have always received the best word of mouth, but the space technology continues to advance with big names behind it and a market that has seen significant growth during COVID-19.
RESOURCES
First Look: 2021 Tech Priorities & Budget Outlook for States
Get a first look at state IT priorities and opportunities for 2021 at our market briefing on October 20th. Dustin and I will take a deep dive into:
- Short- and long-term prognosis for state government budgets and what this means for IT spending
- Current priorities and needs of state IT organizations
- Mission-critical initiatives that are top-of-mind for state IT and policy leaders as they look ahead to 2021
Latest Episode of ICYMI (In Case You Missed It)
From spending diverted to fund crisis-related tech initiatives to startups driving unprecedented change in government innovation, gov tech is hotter than ever. On the latest episode of ICYMI, e.Republic Chief Innovation Officer Dustin Haisler and I share the latest gov tech market news and intelligence.
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