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Dear Sacha,
It'll
be a roller coaster year. Will it be good, will it be bad, or
will it just be ugly? As always, we won't get that crystal ball
until the end of the year. The answer depends on too many factors
influenced by too many people. An important point to remember,
though, is that you're one of these people. What can you
do? Maintain a positive outlook and always search for answers,
and you might be surprised just how much influence you can have.
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2008 may be another year that demands new answers
Despite
the generally grim economic outlooks, Michael Keating believes there's
evidence that 2008 may actually be a positive year for public
spending. The new president won't be elected until the end of the
year, which means that the elections, as hot a topic as they are, will
have little impact on 2008 budgets. Especially where
infrastructure and public safety is concerned there will be budget
increases. By the end of 2008 the expected spending per capita
will reach $9,346, more than three hundred dollars more than was spent
by the end of 2007.
The growth in spending is reasonable given
the expected growth in revenues, both federally and amongst the
states. More than 75% of the states had higher revenues in 2007
than they had expected. Spending isn't growing across the board,
of course. Locally government spending is focusing on improving
infrastructure, with budgeted items ranging from eco-friendly buses to
new or improved escalators, elevators, and even moving walkways.
On the other hand popular items from last year, such as alternate
fuels, financial and insurance services, are likely to see a general
downward trend.
You
know that nobody can afford to rest on their laurels when it comes to
budgets and fiscal responsibilities, so you're probably expecting a
"but". I won't disappoint you. Experts at the Council of
State Governments point out that "current state revenues lag long-term
historical trends, and a number of states are already signaling the
onset of budget shortfalls. States continue to face rising expenditures
for health care, education, retirement systems, corrections,
transportation, emergency management and infrastructure. In 2008,
states will confront the combined pressure of dealing with these
expenditure categories and the fallout from the contracting national
economy."
There is reason for optimism, but it isn't all
rosy. There are economic problems to be faced. Kim Reuben
of the Urban Institute sums it up nicely, "So how that's going to
trickle down to the states, and how states are going to make decisions
about issues like health care, when the federal government is sending
very mixed signals, remains to be seen." Hopefully delays in
Congress will not cause excessive state budgetary problems. If
there's one thing that's needed for 2008 to become a positive year,
it's clarity.
In some states cities or departments are looking
to new IT solutions to enhance operational and budgetary
efficiency. Especially with the potential that on-demand
solutions provide today, such expenditures can be less of a burden than
you'd be inclined to think. Success stories for people who have
adopted solutions like the ElectronicTendering System are not
rare. Such costs often more than justify themselves with the
resultant savings.
While 2008 presents some reason for concern,
these shouldn't overshadow all the reasons for optimism. New
solutions are available, be they adopting IT products to cut costs or
generating new sources of revenue, and a positive outlook will always
provide answers where a pessimistic mindset will only find
problems. 2008 may be another year in which we find that the 21st
century is one in which the old answers no longer suffice.
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Much
of what's going on right now may not have any real effect until it's
over, but who the next president will be preys on our minds. How
can it not? It'll be a reality that we must contend with for the
next four years. Whether it happens now or it'll happen tomorrow, this
year is without a doubt going to be another one to remember.
Sincerely,
Sacha Hartmann
YSER Inc.
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