As we move toward the November 2008 elections, public officials and policy analysts are predicting a robust course for government budgets and spending.

The ticket to fiscal prosperity may be marked by some uncertainty and economic detours along the way. However, by the time voters elect a new U.S. president, forecasts indicate that 2008 will turn out to be a solid year.

Highway expansions and maintenance, public-safety building construction and homeland security all will see boosts in their budgets during 2008. In addition, new technology applications in government, including state-of-the-art voting tabulating tools, will receive ringing endorsements this election year.

For a quick overview of the budget consensus, Government Product News conducted an informal, exclusive poll on GovPro.com. We asked online visitors how the 2008 budget of their agency or department was shaping up, compared to their 2007 budget. To date, their responses were as follows:

• Higher than last year’s—48 percent.
  
• Lower than last year’s—28 percent.
  
• About the same—24 percent.
  

Go to http://www.govpro.com to cast your budget vote, see the latest poll results and find additional budget forecasts throughout the year.

Significant spending will tally up

During 2008, government spending on goods and services is predicted to grow and prosper. Per-capita government consumption expenditures and gross investment (one measure of government purchases per person in the U.S.) will grow $304 between the fourth quarter of 2007 and the fourth quarter of 2008. By the fourth quarter of 2008, government consumption expenditures and gross investment will reach $9,346 per person, Economy.com estimated in an exclusive analysis for Government Product News. This figure is an increase from $9,042 per person, calculated for the fourth quarter of 2007.

What’s more, government purchases of goods and services are trending upward through 2014. As shown on Global Insight's goods and services chart, figures indicate that federal, state and local purchases will rise steadily. Global Insight provides economic, financial and political trend data covering 200 countries and 170 industries and governments.

Likewise, federal revenues are growing, the Congressional Budget Office reported in its latest budget forecast through 2017. See federal revenue chart for year-by-year figures.

Meanwhile, U.S. Communities, which provides a national purchasing forum for local and state governments and many other public agencies, is seeing a high demand among cities, counties and schools for a variety of items. One such item involves upgrades for sports fields.

“We will be awarding an artificial-turf contract in the next 30 days,” explained Kevin Juhring, national program manager of U.S. Communities. “This will be followed by an athletic/stadium lighting solicitation and award. The turf-field category is a major and growing trend across the country, with some agencies having budgeted for as many as 100 fields over the next five years at a cost of between $500,000 to more than $1 million each. Lighting, which is necessary to make turf economically desirable, adds another $100,000 to $200,000 to the cost of each field.

“Our other focus for 2008 is ‘green’ purchasing,” Juhring added. “We have created a Go Green program—details can be found at http://www.gogreencommunities.org. Procurement professionals across the country are being handed green mandates by elected officials. U.S. Communities is not only looking to provide new green contracts, we are greening our existing offerings. Most of our current suppliers have significant green offerings. For example, in 2007 our Office and School Supply contract had green sales over $85 million.”

Juhring also added that U.S. Communities is considering solicitations in 2008 for the following products and services:

• Audio-visual and consumer electronics. “There’s high demand in K-12 education [for this equipment],” Juhring noted.
  
• Elevator sales, repair and service, including escalators and moving walkways.
  
• Transit buses, both hybrid and diesel-powered.
  
• Alternative energy.
  
• Mobile offices and classrooms.
  

However, although government purchases and spending remain significant, their growth rates in selected commodities might be slowing a bit. For instance, Seattle-based Onvia, which specializes in government business intelligence, reports that growth has slowed from double-digit rates in the following categories for local, state and federal purchases, based on activity levels:

• Alternate fuels.
  
• Construction.
  
• Financial services.
  
• Insurance.
  

“Growth trends have flattened over the last 12 months with additional correction likely, given across-the-board budget challenges stemming from reduced revenues,” predicted Michael Balsam, Onvia’s vice president of products and services.

Onvia’s Dominion database tracks government sales information that companies can consult to discover sales opportunities. The company’s 9,000 clients represent a variety of industries.

States pursue wealth of primary revenue sources

Forecasts indicate that 2008 will be a time of transition, not just for officeholders up for election, but also for state government budgets.

Good news was included in the “Fiscal Survey of States,” issued in December 2007 by the National Association of State Budget Officers (NASBO) and the National Governors Association (NGA). The report noted that “State fiscal conditions remained strong for most states in fiscal 2007, but overall growth slowed slightly from the robust conditions of fiscal year 2006. Revenues were generally stable and only one state was forced to make mid-year budget cuts.”

For fiscal 2008, the report explained that state spending is budgeted to grow at a rate of 4.7 percent. In fiscal 2007, state general-fund spending grew at a rate of 9.3 percent, which was significantly higher than the spending growth-rate average over the past 30 years of 6.4 percent. This high rate of growth is the result of states using surpluses achieved in recent years to bolster spending on programs that experienced budget cuts in the last fiscal downturn.

In fiscal 2007, most states’ revenue collections exceeded expectations, the NASBO/NGA report noted. Revenues, in fact, exceeded expectations in 38 states.

“Fiscal 2007 tax collections of sales, personal income and corporate income taxes were 5.6 percent higher than fiscal 2006 collections,” according to the report, which added that “states have budgeted for more moderate revenue growth in their fiscal 2008 budgets.”