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In Finance Letter, DMV Seeks Millions for IT Initiatives

Recent finance letters documenting changes to Gov. Gavin Newsom’s 2023-2024 Fiscal Year proposed state budget also contain information on tech work underway at entities including the California Department of Motor Vehicles.

California state Capitol building against a clear blue sky.
California State Capitol
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Lawmakers and IT leaders are at work on the 2023-2024 Fiscal Year state budget, which per the state constitution must be approved by June 15, but “spring finance letters” offer a more definitive view of technology projects underway.

The spring finance letters, from California Department of Finance leadership to the chairs of state Senate and Assembly budget committees, reflect certain changes to Gov. Gavin Newsom’s FY 2023-2024 budget proposal. Newsom’s May Revision of that proposal came out May 12. Several ongoing initiatives at the California Department of Motor Vehicles are documented in one of the letters. They seek:

  • A one-time increase of about $4.5 million for DMV’s Motor Voter program, to “plan and initiate an IT project that will separate the transmittal of voter registration information to the Secretary of State from the completion of any DMV transaction.” This is required by state statute as enacted by state Assembly Bill 796. The request is to let DMV access the funding when planning through the California Department of Technology’s Project Approval Lifecycle process is done.
  • A reappropriation of about $30 million in Motor Vehicle Account (MVA) funding that was previously approved, to enable DMV to continue with its Digital eXperience Platform (DXP) project, its ongoing large-scale and comprehensive modernization. Per the letter, DMV required potential vendors to conduct extensive testing before awarding the contract, causing a delay in the encumbrance of funding. DMV’s next contract award, for driver licensing software, is now slated for June, the letter said, noting this request will provide funds if the next award period goes into FY 2023-24. In October, as Industry Insider California reported, DMV awarded a $46 million contract to Deloitte Consulting for systems integration on the second phase of DMV’s work on DXP, which is vehicle registration.
  • A reappropriation of about $6.6 million in already approved MVA funding to continue “planning and project activities for the federally mandated Commercial Driver Licensing Information System.” The planning and the funding were originally approved with the 2021-22 FY budget so that DMV would meet the Nov. 1, 2022, federal deadline — but the letter points out that the federal Department of Homeland Security moved the deadline to Aug. 22, 2024, for the state to join the national data sharing system related to commercial driver’s licenses; and to Nov. 18, 2024, for drug- and alcohol-related data.
  • A reversion of $24 million of the “unexpended balance of appropriations” made for REAL ID transactions in the 2021-22 FY budget — due to the extended federal implementation timeline for REAL ID. Per the letter: “As a result of lower revenue projections and a resulting increase in the budget problem, the May Revision proposes adjustments to this expenditure” to help bridge the state’s estimated budget shortfall of $32 billion and balance the state budget. As Industry Insider recently reported, DMV would receive about $1.45 billion from Newsom’s May Revision, down from more than $1.47 billion in January.
  • Per the letter, DMV also asks to modify statutes pertaining to its Mobile Driver’s License pilot — increasing the population cap for testing in that pilot from 0.5 percent of licensed drivers to 5 percent. By working with major app developers for smartphones, DMV found that the 0.5 percent cap, equal to 137,000 users, was “too small of a sample size to achieve meaningful testing of the application.” The increase it seeks — equal to 1.37 million users — would provide enough data for a “meaningful analysis of the application.” As Industry Insider reported in January following the release of Newsom’s first proposed 2023-24 FY state budget, the governor indicated then that in “just a matter of months,” residents would be able to “get your driver’s license into a digital wallet.”
Theo Douglas is Assistant Managing Editor of Industry Insider — California.