SLED 101 Series – Follow the Funding

By Rachel Eckert, SLED Market Intelligence Manager

This second installment of our SLED 101 series focuses on funding and budget cycles.

Not all money is created equal when it comes to state, local and education (SLED) funding. Understanding where money comes from and how budgets are built will help you better time and align your sales efforts to when your customers will be most receptive to new IT project ideas.

Funding sources dictate spending flexibility.

Let’s start by understanding the different sources of spending. The largest chunk of spending in most states comes out of what is typically referred to as the General funds budget. This budget represents the largest share of revenue collected by states and significantly impacts a state’s overall ability to spend. General funds have the most flexibility and are recurring funds received yearly. They can be used for a variety of products and services, including include IT. Most of your sales will come from this budget.

The other pieces of the pie, like Federal or Other state fees, have stipulations and limitations on their use, making them a bit more challenging to leverage. This isn’t to say that there aren’t IT opportunities related to Federal funds or Other state fees, just that those funds are less flexible in their use and allocation.