$2.5 Billion in State & Local Real ID Spending Through 2012. Compliance with Real ID Act of 2005 to drive spending

Input: State and local government spending on Real ID initiatives is estimated to be $2.5 billion through 2012, the authority on government business. The major driver behind the market’s growth over the next six years is the need for states to comply with the Real ID Act of 2005’s new standards for issuing driver’s licenses and identification cards. The new standards require potential changes to state systems applications and the management of information tied to standardized identification systems across jurisdictions.

The Real ID Act gives states three years, until May 11, 2008, to implement the new standards. According to the law, after that date, the federal government will no longer recognize driver’s licenses and identification cards from states that do not meet the minimum standards. This would force citizens of states that did not comply to carry their passport to gain entry into courts, airports, and other federal locations because their license would no longer be accepted as a valid form of identification.

Varying levels of commitment, progress, and spending have been seen across the states, but clearly, fifteen months after the Real ID Act of 2005 was passed, there has been more talk than action in terms of implementation, . Once Department of Homeland Security (DHS) guidance is published and adequate funding is released, INPUT expects vendors will begin to see traction in the contract area. Although spending is expected to increase dramatically as the 2008 deadline nears, the timeframe to fully implement Read ID is likely to change. Critical regulations from DHS have been delayed and conflicting cost estimates between the Congressional Budget Office’s report and the states are further complicating the issue. The National Governors Association (NGA) and National Conference of State Legislatures (NCSL) will be releasing their official cost estimates for Real ID in the coming weeks and the numbers are expected to be staggering. If states continue to shoulder the majority of the costs, INPUT anticipates a protracted implementation that will go far beyond the current 2008 deadline.

Barring another historic event such as 9/11, it is unlikely the federal government will be able to muster the funding or the public support to force swift implementation of Real ID. But, if the anticipated adequate funding becomes available, INPUT projects significant contract opportunities for vendors through 2012.

INPUT's State & Local Real ID Implementation TargetView

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