“Whole-of-state” is the focus for 2024 SLED 2024 IT spending

Cybersecurity, AI and efficiency are top priorities

By Benjamin Harris, Market Intelligence Manager, immixGroup

The “whole-of-state” approach to budgeting and collaboration at the state, local and education (SLED) level is among the top drivers behind how technology investment is being directed during 2024.

Of the $138.9 billion budgeted across SLED for 2024, IT services makes up $59 billion. Software products represent $13 billion. By 2025 those numbers may increase to $61 billion for services and $14 billion for software products.

Here are the areas that will lead budget discussion this year for key players in the SLED market. This information was gleaned from an analysis of publicly available budget information from government agency websites, private, subscription-based organizations that track government spending, as well as other open-source material.

State-level highlights

California. California’s IT budget for 2024 is $13 billion. The state’s top IT investments include $198 million for modernization to its Employment Development Department, $126.6 million for COVID-19 response and $93 million for REAL ID. The IT strategic priority for California is delivery of easy-to-use, fast, dependable and secure public services.

New York. New York is committed to a “whole-of-state” approach to cybersecurity. The state’s $5.4 billion IT budget includes $391 million for centralized technology services, $50 million for data analytics and $30 million for technology financing. Priorities include digitizing services, enhancing its cyber posture and creating a “One ID” system for residents to access services across all agencies.

Texas. Out of a $5.4 billion IT budget, Texas’ top IT investments include $323 million for IT oversight and program support, along with $270 million for data center and shared technology services, and $53 million to promote efficient security. Priorities include enhancing data management practices to bolster analytical decision making.

City-level highlights

District of Columbia. DC has a 2024 IT budget of $369 million, of which $17.5 million will go to updating its traffic ticket processing system, and $3.5 million to the P-20W data system to measure and use information on student college and career readiness and outcomes. DC’s IT strategic priorities include improving user-centric digital experiences, IT operations, and infrastructure and cybersecurity.

San Francisco. San Francisco’s strategic goals include prioritizing service accessibility, redesigning operations and introducing innovative services for government modernization. The city’s $291 million budget will earmark $26 million for major IT projects, $10 million to improve data access, and $6 million for security consulting and design services.

Philadelphia. Of $270 million in its IT budget, Philadelphia will invest $11 million in records digitization and storage, $8 million in upgrading cloud solutions and $8 million in data systems for essential services support. The city’s priorities include transforming recreation centers to broadband anchor institutions, updating fire department IT and developing citywide electric vehicle charging.

Chicago. The Second City’s $240 million IT budget includes $50 million for computer hardware, software, peripherals, cloud, and related maintenance and installation services. Chicago’s IT priorities include people-first digital services, securing cities and assets, and creating a data-driven city.

Education highlights

University of Michigan-Ann Arbor. The University’s $523 million IT budget includes a 5 percent increase to base operating appropriations, plus one-time resources for infrastructure, technology, equipment and maintenance. Approximately $70 million will be directed at enhanced enterprise IT security and increased support for data visualization software.

University of California – Los Angeles. UCLA’s $422 million IT budget is focused on infrastructure solutions such as modernizing telephony services to eliminate costly hardware equipment. The university will also focus on application modernization to replace its aging mainframe-based financial aid system, among other modernization activities. 

Chicago Public Schools. With $169 million in its IT budget, the Chicago Public School system is directing $20 million to technology wiring, cabling, and voice network maintenance and support. Another $20 million is allocated to upgrading or replacing the existing ERP system, with $10 million for firewall replacement and related services.

It will be fascinating to watch whether SLED budgeting will match spending realities as we move through 2024. In the meantime, it’s clear that priorities at each level will mirror each other as SLED moves to a fully “whole-of-state” IT philosophy.

Benjamin Harris is the SLED market intelligence analyst for immixGroup, the public sector business of Arrow Electronics. immixGroup delivers mission-driven results through innovative technology solutions for public sector IT. Find out more about immixGroup’s SLED contract vehicles here.

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