The U.S. economy and government budgets appear to be getting back on their feet in 2012. Sure, the federal budget deficit in 2012 will still be huge — around $1.1 trillion, but so is the government market.

In 2012, government purchases of goods and services will reach $2.99 trillion, down slightly from $3.03 trillion in 2011, according to Waltham, Mass.-based economic forecaster IHS Global Insight. Of that amount, federal government purchases of goods and services will total $1.22 trillion in 2012, while state and local government purchases will reach $1.77 trillion. By 2013, state and local government purchases of goods and services will rebound to $1.79 trillion, predicts IHS.

Some say that the recovery of the U.S. economy and healthy government budgets in 2012 still looks dicey. That statement may be true, considering the number of states (as well as the federal government) that are looking at legalizing Internet gaming and/or casino gambling as a revenue generator. More about the gambling initiatives later.

Experts from the National League of Cities, the Public Works Financing ewsletter, the National Association of State Budget Officers and other organizations offer their views on 2012 government budgets and government spending.

A few of the topics we are covering: federal and state budgets, public private partnerships, local government budget trends, government construction and government spending.

Federal budgets

Federal revenues will rise to $2.64 trillion in 2012, up from $2.31 trillion in 2011, the Congressional Budget Office (CBO) says. CBO has predicted that the federal budget deficit for 2012 will reach $973 billion. This report looks at revenue-generating proposals that Congress may consider, including regulating online gambling. Read about federal budgets in the first part of this series.

State budgets

Finances have improved since the depths of the recession, but states still face a tough fiscal situation, according to a report released in late November by the Washington-based National Governors Association (NGA) and the Denver-based National Association of State Budget Officers (NASBO). Experts from the Center on Budget and Policy Priorities and other organizations weigh in on the fiscal health of states in 2012. Read about state tax revenue in the second part of this series.

Public-private partnerships

The city of Sandy Springs, Ga., has been able to maintain its high level of public service because of the public private partnership model under which the city operates. William Reinhardt, editor of the Public Works Financing newsletter and other experts offer their views on public private partnerships as a budget-balancing tool. Read about public-private partnerships in the second part of this series.

Local government budget trends

In 2012, government purchases of goods and services will reach $2.99 trillion, down slightly from $3.03 trillion in 2011, according to economic forecaster IHS Global Insight. Of that amount, federal government purchases of goods and services will total $1.22 trillion in 2012, while state and local government purchases will reach $1.77 trillion. By 2013, state and local government purchases of goods and services will rebound to $1.79 trillion, predicts IHS. Read about local government budgets in the fourth part of this series.

Government construction

McGraw-Hill Construction estimates that the value of public works construction projects under way will drop 5 percent from 2011 levels, settling at $94.8 billion. Government spending cuts and the absence of a multi-year federal transportation bill for highway and bridge construction are the reasons for the drop, say MHC analysts. Read about government construction in the fifth part of this series.

Series Information

The Keating Report 2012 forecast on government budgets and government spending is in the January issue of Government Product News and is offered in installments at govpro.com. The annual forecast is an update of our mid-year 2011 forecast that was published in the June 2011 edition of Government Product News.

Michael Keating is senior editor for Govpro.com and Government Product News. He can be reached via e-mail at michael.keating@penton.com.

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