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Many Millions in Budget for IT Work on Pension, Employment Systems

Details are being resolved, but the state’s approved budget has more than $250 million for projects at the Employment Development Department, the California State Teachers’ Retirement System and elsewhere.

California capitol building.
Lawmakers and state executives continue to work on trailer legislation accompanying the new state budget, but there’s already many millions in tech spend evident in the 2023-2024 Fiscal Year document.

Gov. Gavin Newsom signed on June 27 the Legislature-approved state Senate Bill 101 omnibus from Sen. Nancy Skinner, D-Berkeley, signifying his approval of the $310.8 billion state budget before July 1, the start of the fiscal year. A completed, enacted budget is not yet available on the state’s public website, but major state entities including the Department of Public Health (DPH), the Employment Development Department (EDD) and the California State University (CSU) system will be receiving millions for technology work and investment.

The tech spend, with rounding, includes:

  • $177.3 million for implementing EDDNext modernization projects at EDD, in two separate amounts. There’s $99 million available for encumbrance or expenditure across two budget years until June 30, 2025. And there’s $78.4 million available following the Department of Finance’s (DOF) approval of an expenditure plan, and no sooner than 30 days after notifying in writing the Joint Legislative Budget Committee. This allotment can be spent after project approval or project delegation approval by the California Department of Technology (CDT). EDDNext is the department’s wholesale modernization of its benefit systems — unemployment insurance, disability insurance and paid family leave — via a single integrated system accessed via a portal. In May, EDD launched a recruiting campaign with five of nine positions centered on EDDNext.
  • $87.2 million to support the Business Renew Pension Solution Project at the California State Teachers’ Retirement System (CalSTRS), funding that was approved by the Teachers’ Retirement Board on March 1. The money will be available for encumbrance or expenditure until June 30, 2025, and available for liquidation until June 30, 2027. There’s also $18.5 million to support IT projects at CalSTRS, available for encumbrance or expenditure through June 30, 2026, and available for liquidation until June 30, 2028. CalSTRS must provide quarterly briefings to DOF on the pension solution project’s progress, including independent project oversight assessments, expenditures, executed contracts and project positions as well as overall progress.
  • $10 million to support the CSU system — specifically for the California Science and Technology Policy Fellowships program. The money is provided on a one-time basis, per the budget bill.
  • $2 million to support the Surveillance, Health, Intervention and Environmental Lead Database project by DPH, part of a larger funding pot that comes from the Childhood Lead Poisoning Prevention Fund. The money can be spent once CDT project approval is obtained. Expenditure can happen at least 30 days after notifying in writing the chairperson of the Joint Legislative Budget Committee, or sooner depending on what the chairperson determines. Written notification must include, from the project approval document, the project’s total cost and schedule.
Theo Douglas is Assistant Managing Editor of Industry Insider — California.