EDD submitted the single-largest IT-related budget change proposal (BCP) among all state agencies, seeking $124,238,000 to cover the cost of new benefit systems “with flexible, user-friendly services” designed to improve service for those seeking Unemployment Insurance, State Disability Insurance and Paid Family Leave benefits.
A BCP is the tool that state entities use to request changes in funding as their needs change. They are typically compiled through the year and submitted with the governor’s proposed budget for the next fiscal year. Gov. Gavin Newsom sent his proposed spending plan to the Legislature last week for consideration. The Legislature is expected to approve the document this summer, after the May Revise reconciliation and negotiation process.
EDD has filed two BCPs — the $124 million request for its ongoing EDDNext initiative, and a separate $13.8 million BCP for its cybersecurity program.
Of the larger request EDD says in its BCP, “these resources are critical to funding the fourth year of the modernization of EDD’s benefits systems and services.”
EDD’s modernization efforts were complicated by the COVID-19 pandemic beginning in March 2020, which brought a surge in demand as well as a rash of fraud.
“The 2022 Budget Act included $136 million for work related to the first year of the EDDNext modernization effort, which included going live with a simplified and more secure way for logging in to access benefits,“ the BCP reads. “The 2023 Budget Act then invested $198 million to continue work related to the second year of the EDDNext modernization. Most recently, the 2024 Budget Act included $327 million to continue the third year of the project.”
The objective now, according to the BCP, is to bring on a system integrator “and begin the multiyear replacement of the legacy claims systems and implementation of the modernized claims processing capabilities.”
The objectives of EDDNext for FY 2025-26, according to the BCP, are:
- Enhancing customer-centered service design by boosting multilingual service, broadening accessibility and providing support across channels such as mobile, social media, self-service websites, live chat and others
- Increasing self-service opportunities by simplifying the claims intake process and expanding self-service functionality across all programs
- Mitigating fraud by protecting claimant identity and reducing risk with new claims processing and technology-driven solutions
- Improving consistency in program delivery by extending data analytics to deliver more useful claims processing information and enhanced employee training
- Greater adaptability for faster program changes with an integrated benefit system that can be upgraded and modified more quickly, and implementing entirely new benefit programs, such as the emergency federal Pandemic Unemployment Assistance program passed during the pandemic
