But when it comes to technology, we often take a different approach. We still tend to treat IT as if it were an annual operating expense rather than long-term infrastructure. That mismatch between how we finance technology and how modern IT projects are delivered leads to the friction we often see between IT vendors and state project teams.
Having worked inside state government, I have seen how this dynamic plays out in real time. California often approves large IT projects with a multiyear scope and a clear total cost. On paper, that looks like a long-term commitment. In practice, the funding that allows the work to proceed is still shaped by annual budget cycles, appropriation timing and fiscal uncertainty that rarely align with the realities of complex system implementation.
THE MISMATCH BETWEEN BUDGETING AND IT PROJECT DELIVERY
Once a project moves from concept to execution, the work inevitably evolves. Vendors are selected, integration challenges become clearer, policy and user needs shift and schedules adjust. This is simply the nature of building complex systems in the real world.
At key moments, projects need timely decisions to continue, pivot or stop. But the budget calendar does not move on project timelines; it moves on legislative and fiscal timelines. When funding or approval decisions lag behind the work, projects do not pause neatly. Teams lose continuity, vendors reprice risk and leadership changes. Often, the momentum erodes. Even well-designed efforts begin to struggle because financing decisions arrive months after they're needed.
While oversight is necessary and appropriate, the problem is that the primary tool for exercising oversight is too slow and rigid for IT governance.
HOW OUR BUDGET OVERSIGHT REWARDS BAD BEHAVIOR
This structure also shapes how projects are designed in the first place. Because departments know that major funding opportunities are limited and uncertain, they often assume this may be their one realistic chance to modernize a system that has been stretched well beyond its intended life. As a result, they include additional modules, future functionality and edge cases that may or may not ever be needed.
Projects become larger and more brittle not because anyone believes bigger is better, but because the financing model encourages an all-or-nothing approach. Iterative delivery and modular implementation become too risky when each phase requires returning to the budget process with no guarantee of timing or outcome. The irony is that a system intended to control risk often concentrates it.
THE CASE FOR AN IT INFRASTRUCTURE BOND
California already knows how to address this challenge when the asset is concrete and steel. For major infrastructure, the state relies on long-term financing tools that authorize funding up front and allow projects to move forward as work progresses. Oversight does not disappear, but it focuses on progress, performance and accountability rather than annual stop-start approvals.
The same logic applies to modern IT. Eligibility systems, payroll platforms, cybersecurity networks, tax administration and statewide data exchanges are not discretionary upgrades. They are core infrastructure. Their costs are front-loaded, their implementation spans years and their value extends well beyond a single budget cycle.
A dedicated bond for IT infrastructure would recognize this reality. Under such a model, the state would authorize bond funds for large, multiyear modernization efforts with clearly defined outcomes. Project spending would be available as milestones are achieved, rather than dependent on annual appropriations to move forward. Departments would then repay the cost of those investments over time, with repayment obligations reflected each year in their budgets.
This structure would preserve legislative visibility and prioritization while allowing projects to proceed without unnecessary disruption. It would also encourage better scoping, because departments would no longer feel pressure to include every possible feature in a single request. Instead, they could pursue phased modernization with confidence that financing would align with delivery.
This approach is not about increasing spending. It is about aligning funding with how the work actually gets done.
FLEXIBILITY WITH RIGOR
Access to this type of financing should come with clear expectations. Only large, multiyear IT systems with defined outcomes and long expected lifespans should qualify. Routine maintenance and incremental upgrades should remain part of the annual budget process. At least initially, eligibility could be limited to the most complex and high-impact systems.
In exchange, these projects should face stronger requirements for transparency, milestone tracking and independent validation. That rigor is not a drawback. It would deter weak proposals while strengthening confidence in those that move forward.
There are also practical benefits. Many state technology projects depend on federal funding. A dedicated financing program could provide the state match or bridge timing gaps, allowing projects to move when needed rather than waiting for reimbursement cycles.
INNOVATION WITH PRECEDENT
This idea is not theoretical. Massachusetts has already established a bond-backed technology modernization program that treats IT as capital infrastructure rather than a short-term operating cost. Like Massachusetts, California must recognize that technology systems are now as foundational to government performance as roads, schools and buildings.
INVEST IN IT INFRASTRUCTURE NOW
California has spent decades refining tools to finance traditional infrastructure responsibly. We know how to authorize funding up front, allocate it over time and maintain strong oversight. The question is why we reserve these tools for physical infrastructure while continuing to finance digital infrastructure through a structure that was never designed for it.
If we want better outcomes from major IT projects, we need to address the incentives that shape them. A dedicated IT infrastructure financing model would not solve every challenge, but it would reduce disruption, improve accountability and align oversight with delivery.
In a future commentary, I will explore how such a model could work in practice, including governance, project selection and oversight. For now, the starting point is simpler. If technology is infrastructure, we should fund it like infrastructure.
