By the Numbers: Here’s a Breakdown of State Budget IT Plans for FY 2024-25

For those who sell technology goods and services to California state government, the insights provided in a recent Industry Insider — California webinar are invaluable. Joe Morris, chief innovation officer for Industry Insider parent e.Republic, summarized the high points in the new state budget, signed in June by Gov. Gavin Newsom.

In his fast-paced 30-minute virtual overview presented earlier this month, Morris pointed out where tech vendors may find opportunities in Fiscal Year 2024-25 and beyond. The webinar video is available for Industry Insider members here; the slide deck from the presentation is available here.

Overall highlights:

• Balanced budget: The Fiscal Year 2024-25 budget closes the $28 billion shortfall, with $211.5 billion in General Fund spending, $86.4 billion from other state funds, and $153 billion from federal funds.
• Prison cost reductions: $750 million in reductions to the California Department of Corrections and Rehabilitation over three years.
• Artificial Intelligence: Provisions for AI consultation between legislative and executive branches, with potential budget resources for AI projects.
• IT Projects: The budget is rich in IT-related projects. We identified 90-plus IT projects varying in size and scope.
• IT Hot Spots: The state continues to lead in generative AI and continues to invest in IT in key areas such as transportation, government operations, health and human services, and many other areas. The following are notable specifics:

California Department of Technology

• Approves May Revision proposal eliminating provisional language authorizing the Department of Technology to augment up to $10 million General Fund in support of statewide technology services.
• $250 million is allocated for the Middle-Mile Broadband Initiative (MMBI), providing that the director of the Department of Finance may augment funding for the MMBI by an additional $250 million if certain reporting requirements are met, as specified.

California Department of Transportation

• $7,747,000 in FY 2024-25 from the State Highway Account. This request includes consulting services, equipment and software for Year One of the Enterprise Data Governance Technology Solution implementation.
• $12,873,000 in FY 2024-25 and $10,195,000 in FY 2025-26 and ongoing to continue expansion of data storage, protect and maintain equipment, and complete network infrastructure upgrades to enable efficient access to very large data sets at designated locations throughout the state.
• Provides a one-year augmentation of $13,500,000, which includes $4,971,000 for 34 limited-term positions in FY 2024-25 and $8,529,000 in operating expenses (OE), of which $8,217,000 is for professional consulting services, to support the transition and onboarding to the FI$Cal System.

Department of Motor Vehicles

• $17.3 million Motor Vehicle Account in FY 2024-25 and ongoing for CDT rate increases for services pertaining to technology project oversight, planning, procurement, and data center.
• $7.4 million FY 2024-25, $7.3 million in FY 2025-26, and $4.9 million in FY 2026-27 and ongoing for five new permanent positions, IT security consulting services, and IT security tools to improve the Cybersecurity Program.
• Adopts 90 temporary positions and $60.3 million Motor Vehicle Account in FY 2024-25 to complete the VR phase and continue the DL phase of the DXP Project. The requested resources will allow the DMV to continue the modernization of business processes and services.
  

Child welfare/foster care

• $173.4 million in FY 2024-25 to support continued project development and implementation costs and an additional $52 million in one-time provisional authority for the Child Welfare Services-California Automated Response and Engagement System (CWS-CARES) Project.
  

California Public Utilities Commission

• Delays $550 million for Broadband Last Mile Grants to FY 2027-28.
• Cuts $700 million from the Broadband Loan Loss Reserve, leaving $50 million.
• $1,860,000,000 in budget authority under the Federal Trust Fund for the Broadband Equity, Access, and Deployment (BEAD) program grant funds awarded to California in the Infrastructure Investment and Jobs Act (IIJA) of 2021 and 31 temporary positions to help California close the digital divide.
• $376,984,000 for FY 2024-25 from the Universal LifeLine Telephone Service Trust Administrative Committee Fund (0471) to provide low-income California households with basic, high-quality wireless and wireline services at affordable rates.
  

Franchise Tax Board

• $127,066,000, with 28 permanent positions and 10 limited-term positions, for the fourth-year implementation of the Enterprise Data to Revenue (EDR2) project, which is the second phase of the Tax System Modernization (TSM) plan.
  

State Controller’s Office

• $9,538,000 in FY 2025-26 and FY 2026-27 to provide consulting services and one limited-term position for the State Controller’s Office’s Book of Record Functionality Migration to FI$Cal.
• $70.1 million in reversion of State Controller’s Office appropriations in FY 2023-24; reappropriates $10.4 million from FY 2023-24 to FY 2024-25 to onboard a system integrator and approves $3.2 million for ancillary contracts related to the California State Payroll System project.
  

Secretary of State’s Office

• $16,774,000 one-time in FY 2024-25 from the General Fund to continue supporting the CARS project and replace the current CAL-ACCESS system for electronic reporting of campaign finance and lobbying activities.
• $11,292,000 one-time Federal Trust Fund authority in FY 2024-25 to cover maintenance and operations vendor, data analysis consultant, Election Management Systems support and verification, data lines, and off-premises cloud costs for the VoteCal statewide voter registration system.

Department of Industrial Relations

• $25,278,000 one-time in FY 2024-25 from the Labor and Workforce Development Fund to continue the development of Cal/OSHA’s information technology system to meet federal and state-mandated requirements, consolidate information into a central database/repository, interface to other Department systems, and automate manual processes.
• $22,194,000 one-time in FY 2024-25 from the Workers Compensation Administration Revolving Fund to continue the replacement of the Electronic Adjudication Management System (EAMS).
• $10,673,000 one-time in FY 2024-25 from the Labor and Workforce Development Fund to complete IT system enhancements and provide maintenance and support for the department’s public works data systems.
  

Employment Development Department

• $326,829,000 one-time in FY 2024-25, funded equally by the General Fund and the Unemployment Compensation Disability Fund to continue the EDDNext Modernization project.

California Department of Corrections and Rehabilitation

• Maintains $50.4 million General Fund in FY 2023-24 and associated ongoing resources for statewide correctional video surveillance projects at five prisons provided in the FY 2023-24 Budget and delays $27.2 million General Fund for the implementation of fixed camera projects at five prisons to future fiscal years (FY 2025-26 and FY 2026-27) and includes a $900,000 ongoing reduction as part of a May Revision technical adjustment.
• Provides seven positions ongoing and $16.5 million in reimbursements one-time to continue the development of an information technology-based Medi-Cal billing system to support the implementation of CalAIM and adopts provisional budget bill related to CDCR’s in-reach efforts, in consultation with stakeholders.