Government Tech Spending to Drop

Thirty-eight percent of city and local government IT budgets will decrease over the next two years, causing a shift in tech priorities, according to a survey of 162 local and state CIOs.

About half of the IT managers surveyed said they expected IT spending would remain flat over this period. Only 14% said spending would increase.

Public safety interoperability will be the top priority, but second will be e-government services or automation projects that can deliver immediate return in cash-strapped governments, said Chris Dixon , an analyst at market research firm Input, which conducted the survey.

With home foreclosures and the overall poor state of the economy , "2009 will be the worst year in the near term," said Dixon. "Next year will be a year of slashing."

What will suffer will be equipment upgrades , consultant hiring and new project deployments. The budget wild card will be the federal response with a new administration, which could boost help for state and local governments, Dixon said.

In total, state and local governments are expected to spend $48.4 billion on IT this year. Dixon said they are still working on forecast for next year, and he expects some increase in technology spending, but not much.

Regardless of who is elected president, federal IT spending in civilian agencies is expected to increase 2% next year, according to the newly merged Information Technology Association of America 's GEIA Group (Government Electronics & Information Technology Association.)

Jim Serafin, vice president of GEIA, said his groups isn't expecting federal IT to shrink overall, although some departments may see a decline. "It's going to be really difficult to cut this budget further without really damaging the operations of most of these agencies," he said.