With a focus on turning the “road to recovery into the path to prosperity,” Pennsylvania Governor Tim Corbett introduced his proposed FY 2013 budget on February 7. Continuing efforts to decrease spending, this year’s budget cuts $20 million in general funding compared to FY 2012.

Core objectives of this year’s budget include streamlining government administration and operations; job creation; supporting human services; and enhancing education. These goals will be accomplished through the consolidation of departments; the rollout of Jobs First PA, a four-program initiative to improve the state’s employee market; enhanced program integrity efforts for welfare programs; and implementing performance measurement tools for all parties involved in providing basic education (preK-12).

Spending increases can be seen in the basic education, higher education, justice/public safety and public finance verticals, ranging from 0.30 percent to 37.52 percent. Health care, social services, transportation, economic development/regulation, natural resources/environment, general government and homeland security verticals will experience decreases ranging from 0.11 percent to nearly 7 percent. More drastic changes can be seen in information technology spending, in which every vertical will see a decrease in spending, ranging from less than 1 percent in homeland security to almost 71 percent in health care.

Analyst’s Take

With IT spending on the decline for FY 2013, it should not come as a surprise that there was little mention of large-scale IT projects in the budget. Instead, IT spending will go toward smaller-scale projects and making enhancements to existing systems. Vendors with efficiency-focused and cost-saving solutions will be well received by state program and procurement officials, particularly if these solutions can improve existing systems instead of replacing them.

That said, with the implementation of block grants for much of the funding for the Departments of Education and Public Welfare, IT spending may increase at the local level while it declines at the state level. Vendors should be prepared for increased collaboration with city- and county-level officials who may take the lead in implementing IT projects and procuring IT vendors.

The state has reauthorized capitals bonds for FY 2013, which contributes to the nearly 38 percent increase in spending for the public finance vertical. It is estimated that FY 2013 new project authorizations will amount to a total of about $1.2 billion, with higher-dollar projects planned for the urban mass transportation, higher education, and environmental protection and management program areas. The reauthorization of these bonds bodes well for the state’s economic health now and in the future.

From the FY 2013 budget, it appears that the commonwealth is making progress on the economic road to recovery. If the state is able to continue its commitment to creating jobs, reforming education and public welfare programs, and streamlining government operations, the economy and citizens will surely prosper.

GovWin subscribers have access to expanded analysis of Pennsylvania’s FY 2013 Executive Budget, including detailed budget data, available here.

On Jan. 23, Massachusetts Governor Deval Patrick delivered his State of the Commonwealth address to a full house chamber. Governor Patrick spoke of the great accomplishments from the previous year while pressing that Massachusetts could do even better. With the right formula of spending and cuts, and the full support of the state senate and house, Massachusetts could improve in several fundamental areas over the next year. Fiscal year 2011 and 2012 budgets showed overall commonwealth spending was steady at $53 billion. Both years included budget cuts in order to remain afloat during the recession. Since FY 2011, fiscal conditions in Massachusetts have improved some, though not to pre-recession levels.

The budget from FY 2011 was significantly lower than recent state budgets; the current budget for FY 2013 represents a 0.39 percent increase from one year ago, but a 6.17 percent increase from two years ago. As the commonwealth moved to fifth place in the nation for job creation in the past two years, the added tax revenue and improving economic prospects more than likely enabled the governor to increase the overall budget.

The verticals that increased the most from FY 2012 were health care, public finance, higher education and transportation. Of these verticals, only higher education was among the largest gainers over the past three years. Another vertical that saw one of the more significant increases was health care, something that Governor Patrick mentioned repeatedly during his address. With increased health care costs throughout the country, it was almost inevitable that costs would rise in Massachusetts. In particular, Medicaid costs have soared, and with many of the new health care laws moving forward, there will be increased costs for records and technology.

IT spending has been rising over the past three fiscal years at a pretty consistent rate. From FY 2011 to 2012, IT spending increased 23.53 percent, and increased a similar 24.62 percent from FY 2012 to 2013. It is evident that the commonwealth is looking to increase its IT spending back to pre-recession levels. In FY 2010, for example, IT spending was $468 million, a total greater than both FY 2011 and FY 2012, but significantly less than FY 2013. The commonwealth has a lot more IT-based initiatives than in the past few years, including increases to individual department’s IT budgets and new line items that will enhance a variety of vertical areas. A deeper dive into the various vertical areas will paint a broader picture of the commonwealth’s IT spending for the upcoming fiscal year.

Analyst’s Take:

While on the surface it seems as though Governor Patrick may not be providing the budget necessary to uphold all of his stated priorities for the year to come, a more detailed analysis of vertical and IT spending revealed that many of those questions were covered in budget measures. For starters, the governor wants to invest heavily in health care, which only experienced an overall increase of 9.5 percent, but showed a nearly 50 percent increase in the IT budget. Health IT projects are booming across the country, and this is no different in Massachusetts, which has allocated $264 million to be spent on health IT.

Over the next fiscal year, health care, justice public safety, transportation and higher education should all be bright spots for funding and procurement. General government IT spending increased by $8 million, or nearly 8 percent, which could lead to a variety of re-competes for software and hardware systems. Massachusetts is often considered an innovator when it comes to being on the forefront of new technology; therefore, with the nearly 25 percent increase in IT spending budget, the commonwealth is poised to use that money on pioneering projects and new systems.

Subscribers have access to expanded analysis, including detailed budget data, here.

Educators and administrators are busy this week trying to recover from Valentine’s Day sugar buzzes in their classrooms, in addition to understanding how President Obama’s proposed FY 2013 budget will affect the future of the U.S. education system. While all of the public sector and public services are experiencing flux and reconsideration, education has found itself at the crossroads of critique and opportunity. Decades-old practices and policies have mired the evolution of classrooms and school days, the disfavor of No Child Left Behind has clogged state planning, and a major economic downturn has cut funding to schools. Sounds pretty bleak, or is it a tipping point that the Obama administration is seizing as an opportunity to revolutionize American education and economic development? The latter seems to be the case upon review of this administration’s decisions and policies thus far, and now with the release of the president’s proposed FY 2013 budget.

Table 1: Federal Grants to State and Local Governments, Discretionary (in millions of dollars)

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Table 2: Federal Grants to State and Local Governments, Mandatory  (in millions of dollars)

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Other areas of the budget proposal include:

• Temporary Assistance for Needy Families (TANF): TANF funding rises nominally to $17 billion in FY 2013.
• Supplemental Nutrition Assistance Program (SNAP): The budget includes $7 billion in SNAP benefits, a 5 percent increase from FY 2011. Although states are seeing record food stamp numbers, the Department of Agriculture (USDA) transferred $400 million to support the Women, Infants, and Children (WIC) Program for FY 2012.
• WIC: Program funds increased by 14 percent to $7 billion, which includes $14 million for infrastructure funding and $30 million for management information systems.
• Child Support Enforcement: Funding took a 7 percent dip to $3.8 billion. The budget request includes new investments of $305 million in FY 2012 and $2.4 billion over ten years for the Child Support and Fatherhood Initiative.
• Child Care: Proposes $6 billion for child care, which includes $2.6 billion for the Child Care and Development Block Grant to supplement assistance for low-income families; and entitlement to states is $3.4 billion.
• Child Welfare: Requests $7.2 billion for foster care and permanency services including adoption and guardianship assistance, foster care, and independent living.

On Monday, President Obama released his proposed fiscal year 2013 budget, which outlines proposed budget figures for highly-relied-upon grant programs within state and local governments. President Obama’s budget provides $632.7 billion to aid state and local governments in 2013 – an increase of $20.2 billion from 2012. Grant outlays for justice programs are estimated at $6.9 billion in 2013. A total of $2.57 billion will be discretionary funding made available to state and local public safety agencies via the Office of Justice Programs (see below). In regards to homeland security, the budget provides the Federal Emergency Management Agency (FEMA) with approximately $4 billion in discretionary funding (see below). In all, states and localities will have access to nearly $6 billion in public safety and homeland security grants for FY 2013.

Highlights:

• The budget provides $2.9 billion for state and local programs to equip, train, exercise, and hire first responders. To better target these funds, the budget proposes eliminating duplicative, stand-alone grant programs, and consolidating them into the National Preparedness Grant Program.
• To retain an acceptable level of fire and emergency response coverage in the current constrained budgetary environment, the budget anticipates $1 billion in immediate assistance for the retention, rehiring, and hiring of firefighters in 2012, as requested by the president in the American Jobs Act.
• The budget provides $6.1 billion for the Disaster Relief Fund.

Department of Justice:

• The budget pro­vides $312 million for Juvenile Justice and Child Safety programs that assist states with their ju­venile justice systems.
• The budget provides $257 million to support America’s first responders and the hiring and retention of police officers, sheriffs, and deputies across the country, and includes a preference for the hiring of post–9/11 veterans. This funding builds on the $166 million in COPS Hiring Grants enacted in 2012. These investments assist in building capacity to enable state and local law enforcement partners to make the most of their resources and encourage their most promising and effective public safety efforts. The budget includes $4 billion in immediate assistance for the retention, rehiring, and hiring of police officers in 2012, as requested by the president in the American Jobs Act.
• The budget provides $413 million to continue efforts to combat the hundreds of thousands of violent crimes against women that are committed each year.

Department of Commerce:

• The budget provides more than $10 billion of mandatory budget resources to help build an interoperable public safety broadband network that will strengthen economic growth and public safety, while benefitting from commercial innovation.

The federal government has had to tighten its belt, and the effects will be felt at all levels. Grant funding available to state and local governments for justice and homeland security programs has decreased, but the demand and need for those grants is likely to be just as high. The increased competition among governments for grant funding could leave some governments without the funding needed to pursue projects.

For more information on the public safety and homeland security market, Deltek and the Industry Council for Emergency Response Technologies (iCERT) have released Justice and Public Safety Market Overview, FY 2010-2012, which examines IT spending levels, trends and drivers, technology segments and their impact, and a look ahead to FY 2013 for the state and local justice/public safety and homeland security market.

In 2010, Onondaga, Cayuga, Madison, Cortland and Oswego counties worked together to form the Central New York Interoperable Communications Consortium (CNYICC). At present time, the Onondaga County Interoperable Communications System (OCICS) is the only one that is fully online. The counties, minus Cortland for the time being, are looking at working together again to develop a better 911 system.

While the CNYICC just spent upward of $36 million on radio upgrades and interoperable connectivity, Onondaga County spends half its budget on technology, and moving to the next best-available system is currently on the table. The county hopes to share the costs of various technologies used within the dispatch center and emergency vehicles. Computer aided dispatch (CAD), 9-1-1 systems, and other tracking systems could be shared and, in turn, bring considerable cost savings to each of the counties.

Analyst’s Take:

The CNYICC should be a model for how counties can save money while still tackling large-scale technology upgrades for citizens. Rather than go ahead with a large-scale radio upgrade on its own, Onondaga County looked to partner with surrounding counties to form a consortium. While the upgrades were still costly and may have taken more time due to the involvement of many entities, in the long run, the cost savings will be significant. Vendors looking to work with a county on upgrading 911 or radio systems can possibly win more business when plans for a multi-county system are on the table. As budgets remain tight, multi-county 911 systems may become more widespread.