States on the High-Tech Trail
As information technology becomes more important to government, several
states are developing programs to support in-house efforts that would normally
stretch the budget.
States including Louisiana, Tennessee, Maryland and New York, have created
funds to invest in state agency IT projects. In its 1999-2000 budget, New
York's legislature provided $10 million for a new Technology Entrepreneurial
Fund to support agency IT projects.
Others, such as Minnesota, encourage agency IT work in other ways. In 1989,
the state began to allow agencies to apply for IT project money every two
years, a program reviewed by the state's Technology Policy Bureau then ultimately
approved by legislative committees.
The level of funding varies, but an average total of $50 million is doled
out, said Greg Peterson, the bureau's planning director. In the most recent
two-year cycle, agencies submitted 160 project requests totaling between
$250 million and $300 million. Of those, the state funded about 50 projects
for $80 million.
Unlike Louisiana's technology investment fund, which requires projects to
be innovative, Minnesota focuses more on business and management practices.
Projects must be well defined, have a solid budget and a strategic plan.
"Some of the projects are to re-engineer or redesign the way an agency does
their work," Peterson said. "A lot of the emphasis is electronic government
services. There's typically time savings, but dollar savings are hard to
Examples of projects that have received funding in the past include a system
to allow one-stop online licensing, a project for state office candidates
to electronically disclose campaign contributions and a plan to redesign
the databases in the state's commerce department.
In Tennessee, agencies for the past 10 years have been able to receive money
from a systems development pool to use for major IT projects that save money.
Agencies must show in a cost-benefit analysis projected savings from a proposed
project system, said Bradley Dugger, the state's chief of information systems.
"If, after a five-year period, there's been enough hard benefit for the
system to pay for itself, then we're willing to fund it for them and let
them pay it back over five years," Dugger said. "Anything that showed a
payback has been funded. Nothing has been turned down. Our approach is to
take the huge spikes out that tend to become budgetary issues. It keeps
[agencies] from being in the competitive market for new dollars."
Dugger said the pool has encouraged agencies to create a strong business
case for new system investment and ensure that investments will result in
true savings. Agencies are held to their commitment of cost reduction, he
said, and officials from the state's quality assurance division monitor
projects to ensure they remain on track.
Projects funded through the pool include one that monitors compliance to
professional licensing requirements and a consolidated tax collection system.
Maryland created its Information Technology Investment Fund in 1996 to energize
agency efforts to use IT, said Preston Dillard, the state's deputy chief
information officer. To be funded, projects must relate to education, public
safety or overall government efficiency, he said. To date, most of the money
has gone to education projects, such as the state's annual Net Weekend,
designed to improve the cable infrastructure in schools.
In the current fiscal year, Maryland gave more than $16 million to agency
"The fund has been so successful that in the current fiscal year we actually
had members of the General Assembly pushing agencies — not just state agencies — to apply for funds," Dillard said.
— Heather Harreld is a free-lance writer based in Cary, N.C.