U.S. Government Predictions 2019: Now that we have completed the 2018 election season, people are asking what is in store for 2019. The good news is that revenues look strong, but there are a number of factors if you look deeper into the numbers. Also, while often the first year of a legislative session occurs before our political leaders are thinking about re-elections, election cycles have apparently gotten longer, because for many American politicians, the 2020 election season has already begun. Tight Budgets Despite Increases In Overall Spending While the National Association of State Budget Officers has reported a healthy 4.3% increase in general fund spending, most of that new money is going to three places: Medicaid, K-12 education, and pension obligations. This will likely squeeze out revenue increases in virtually all other areas. Government will carefully scrutinize any new spending, and will be looking for proverbial “singles”, rather than “home runs”. They will look for opportunities to quickly implement small improvements rather than embarking down multi-year, multi-million dollar projects. Within this context, government will be looking for opportunities to enhance the IT systems they already have. They will likely look favorably at new capabilities that increase their prior investments and get additional functionality without major new initiatives. This will include looking towards analytics as a way to deliver government services in a more efficient manner. Through the use of optimization tools, government can identify opportunities to enhance customer service and performance outcomes without increasing staff requirements. Continued Pension Challenges Drives Government HR Policies In what may be one of the most under-reported government news stories of the year, Moody’s reports unfunded state pension liabilities have now increased to $1.6 trillion, up from $1.3 trillion just a year before. To put this in perspective, every American would have to give approximately $4,800 to cover this deficit. Another way to look at it is that if Illinois abandoned all state funding (police, K-12 education, prisons, etc.) for the next six years, and took 100% of their current tax revenue and allocated it 100% to its pension fund, the state would still be underfunded for their promised payouts. Within this environment, states are going to need to look towards significant changes, including changing the structure of their plans (especially for new hires), increasing the amount of money placed into their pension funds. In most cases, state’s cannot reduce payments to retirees, they are typically guaranteed to the retiree through the state’s constitution. Some states have greater flexibility to reduce their Other Post-Employment Benefits (OPEB), most typically healthcare subsidies for retirees. The existing OPEB liabilities for states are estimated to be $692 Billion, as of 2015. Within this environment, government will be looking for solutions that provide enhanced service without adding additional staff which would incur new pension liabilities. This may include automating currently manual processes, outsourcing back-office or service functions to private businesses, or eliminating services that are deemed non-essential. Enhanced Customer Service Delivered Through Self-Service Within the context of these pension challenges, government will continue to look for solutions which reduce the dependency on government staff to provide public-facing services. These could include novel approaches to support infrequent interactions, by automating currently manual processes. For example, look for governments to move away from traditional license renewals, which require citizens to mail applications and fees to ones with automate renewals using stored payment mechanisms. Imagine if rather than getting a renewal form in the mail, and having to mail a check for a motor vehicle registration, the government simply emailed the ca