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3/3/2009
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Stimulus Plan To Drive $5.7 Billion In State, Local IT Spending

Broadband, health care, education, and transportation are among the biggest recipients.

The federal stimulus plan is expected to fill state and local coffers with as much as $5.7 billion, potentially earmarked for IT projects, an analysis of the funding issued this week reveals.

Most work to date on the $787 billion federal stimulus plan has been done in Washington, but a good bit of the spending will be done much more locally. Broadband, health care, education, and transportation are among the biggest recipients.

Roughly a fifth -- $160 billion -- of the stimulus money is expected to flow to state and local governments, according to market research firm Input, and of that potentially $5.7 billion could be spent on IT.

From $10 billion to $25 billion of the state and local funds will go to nonprofits at the community level, said Input analyst Chris Dixon. Health care facilities are expected to absorb some of those funds. For example, $1.5 billion has been allocated for construction and renovation of health care centers, and IT is an eligible expense for any of those funds, Dixon said.

The rest of the $160 billion will go directly to the states, with broadband investment the top IT-intensive area states will spend stimulus funds on, Dixon said. Broadband has only been funded with a couple hundred million dollars to date, he said, so "$4.7 billion is a massive infusion in this area."

In most other areas, IT will be competing with other demands for the stimulus funds, but in most cases "IT is on the radar," Dixon notes.

Other areas where Input expects state and local IT spending to be strong include:

  • Education, with $80.6 billion allocated to primary and secondary education. Of that, $650 million has been allocated for state and local technology grants that could be used for training and educating teachers on how to use technology in the classroom, Dixon said. Funds also are likely to go to school renovation, which would include computer facilities.
  • Transportation, with $47.8 billion designated for state and local investment. Money has been allocated for maintenance and repairs, traffic monitoring, and congestion management.
  • $3.9 billion for employment and training services as part of the Workforce Investment Act of 1998. Some of that will be devoted to online tools to help with claims processing for unemployment benefits. "This is one area with quick turnaround," Dixon said.
  • $2.8 billion for state and local law enforcement, which could include predictive crime fighting and rap-sheet integration systems, as well as laptops in squad cars.


InformationWeek Analytics is conducting a survey to determine what government IT organizations at the local, state, and federal levels are doing to tackle today's diverse challenges and make tough economic decisions. Take part in InformationWeek's Government IT survey before March 6 and be eligible to win an iPod Touch. Find out more.

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