Big Picture: Time to Watch Those Budgets
Oddly, states have used federal stimulus money aimed at technology upgrades to cover budgetary shortfalls. The worst-case scenario is emerging in California, where education budgets were fiercely protected. That's no longer the case. Taxpayers who traditionally supported schools, school improvements and teacher pay increases, are changing their tune as the economy worsens. On top of that, California must now pay its bills with a form of IOU that many bailed-out banks are refusing to honor.
California is perhaps the most extreme example of the budgetary crises, but there are at least six other states close behind. As state spending comes to a screeching halt, the overall impact will be ugly. The effects ripple through the local economy and then branch out through the state, region and beyond.
That's why CE manufactures and retailers must pay close attention to the emerging trend of state budgetary difficulties. While most vendors can adapt and retrain their targets, many will be caught flatfooted if they are not cognizant of the storm clouds that have moved from the horizon to just overhead.