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Analysis: Newsom's Budget Foreshadows Big Plans for Tech

Gov. Gavin Newsom was predicted to be the technology governor, the guy who was going to shake things up. When it comes to IT and governance, he's already taken some steps in that direction.

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Gov. Gavin Newsom was predicted to be the technology governor, the guy who was going to shake things up.

His $209 billion 2019-20 proposed budget, released on Jan. 10, supported his plan to be innovative.

At least $160.9 million is aimed at the state’s technology projects, with a separate $401 million set aside for the California Department of Technology. While these projects will undoubtedly offer vendor opportunities, Newsom’s changes are likely to hold more.

For example, the $160 million is considered the lower limit because not all the money being directed toward projects is earmarked for technology. Some of the deferred-maintenance projects outlined in the budget, which are slated for $315.8 million, could include technology modernization efforts. However, that is not spelled out in the budget. And this document is only his proposed budget; the next step for the budget is the May revision, released by the Department of Finance on May 14, and then final approval by June 15 by the Legislature.

Newsom has left a lot of room for interpretation, being prescriptive about what will be changed but not how. He set up a procurement tool — Request for Innovative Ideas, or RFI2 — that invites subject-matter experts to sit at the table with vendors, the private sector and the public sector.

The governor decreed the creation of an office that looks for new ways to deliver services because “innovation isn’t exclusive to technology,” according to Richard Gillihan, chief operating officer for the state Department of Finance. Newsom also wants to open an innovation academy — with executive attendance mandatory — that aims to change the way state leaders at all levels think. The office is slated for $36.2 million in startup funding. It is associated with a $20 million innovation fund "to assist departments with the tools and resources necessary to address prioritized needs. ..."

He is also putting expert teams in place to address problems that are not under their normal purview. One instance of this is Government Operations Secretary Marybel Batjer. Newsom’s administration sees GovOps as one of the first forays into innovative government changes. So choosing Batjer to head a strike force tasked with recommending fixes for the beleaguered Department of Motor Vehicles — which is in a different chain of command in the state hierarchy — makes sense.

The DMV has been struggling to make Motor Voter, its automatic voter registration system, work smoothly while attempting to meet federal Real ID mandates. "The budget continues current efforts to address DMV's increased workload resulting from the federal Real ID mandate by providing $63 million and 780 positions, consistent with current year funding levels," his budget notes.

Newsom has also challenged the state’s courts to digitize. The courts voted to unify their systems in 2001, but that case management system will be shut down by 2020. Around that effort, and to support courts while they work on replacement systems, Newsom proposed more than $41 million. Of that, $23.1 million is set to replace 14 case management systems, setting the table for digitizing 10 trial courts across the state. Another $5.5 million is set to support business intelligence, data analytics and identity management, and a separate $5.6 million goes toward digitizing court records.

While nothing in the proposed  budget is set in stone and still needs to be approved by the Legislature, it illustrates Newsom’s priorities. It’s telling that Newsom is pulling in leaders like Batjer and vendors into new areas. He’s hoping to infuse new thoughts and ideas into areas that have been run the same way for decades.

And it could work. Revamping the way things are done has been the battle cry of Californians for years. If Newsom can get the Legislature behind his budget priorities, the 2017-18 tax year was good to the state and could provide enough green to get things started. The May revision will see some adjustments, as every May does, but this year should include enough revenue to fulfill his plans. 

Next year's forecast is for a leaner state economy, so the splash starts now. 

The state is changing, so Newsom is betting that its methodology should too. And new methods will mean new contracts.

Kayla Nick-Kearney was a staff writer for Techwire from March 2017 through January 2019.