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How California Governor’s Budget Shortfall Action Impacts IT

Gov. Gavin Newsom signed legislation Monday on an early action budget agreement among legislative leaders that will cut the shortfall by about $17.3 billion — and return millions for tech to the general fund.

California state capital, surrounded by state government buildings in Sacramento, CA
Shutterstock/Merge Digital Media LLC
The deal is done and the ink is dry on Gov. Gavin Newsom’s legislative stab at addressing the state’s $17.3 billion budget shortfall — it’s a mix of billions and billions of dollars in reductions, delays and deferrals.

Assembly Bill 106, as it’s formally known, was signed Monday and includes some $3.6 billion in reductions, $5.2 billion in revenue and borrowing, another $5.2 billion in delays and deferrals, and $3.4 billion in funds shifted from the general fund to other funds, according to the governor’s office.

The deal “strongly positions” the state, Newsom said in a press release, to strike a balanced budget in June. But what exactly does it all mean for IT and the agencies that support it, including the California Department of Technology (CDT)?

Among the many programs and agencies affected by the bill, the Senate and Assembly analyses of the bill included the following related to IT:

  • Reverts $5.5 million to the general fund in 2022-2023 from the California State Payroll System Project. 
  • Reverts $27.2 million to the general fund in 2023-2024 for the installation of five fixed camera projects at the California Department of Corrections and Rehabilitation, which are now proposed for 2025-2026 and 2026-2027, and maintains $50.4 million general fund in 2023-2024 and associated ongoing resources to implement five other projects. 
  • Delays $42 million to the general fund for the Health and Human Services Innovation Accelerator, approved in the 2023 Budget Act.
  • Reverts $2.9 million to the general fund for the Interagency Forest Data Hub from the California Department of Forestry and Fire Protection (Wildfire Resilience Package).
  • Reduces $900,000 in general fund expenditure authority to support the COVID-19 website, which will be transitioned to the California Department of Public Health (CDPH).

Within the law itself, there were several mentions of technology funding worth noting. Some figures have been rounded.

  • For the CDPH, $18.1 million (part of a pot of $773 million) would be available through June 30, 2025, for the Information Technology, Data Science and Informatics Framework for a 21st Century Public Health System. An additional $15.8 million would be available for this initiative pending approval from the California Health and Human Services Agency and CDT.
  • For the California Department of Corrections and Rehabilitation, up to $2.6 million (part of a larger pot of $805 million) for licenses and endpoint protection software for the devices used by incarcerated individuals. Another $8.1 million would be available to begin upgrades to the department’s current System Applications and Products (SAP) to S/4 HANA. A provision in the law also outlines video storage requirements of no less than 90 days for a number of incident types that could face “administrative, civil, or criminal proceeding(s).” 
  • For the Employment Development Department (EDD), nearly $6.8 million (part of a larger pot of nearly $260 million) would be made available to expand language access to benefits; another $4.5 million would be available to support the Microsoft Office 365 enterprise license agreement; and nearly $78.4 million would be available for the EDDNext modernization projects.
  • For the Department of Industrial Relations, a provision was included in the legislation that would require a new online resource guide for “minimum wage, overtime, sick leave, recordkeeping, wage adjudication, and retaliation for domestic workers and employers.” 
  • For the Department of General Services, $20.4 million (part of a more than $45 million pot) would be available for a state-building fire alarm project, while another $11.8 million would be made available for projects to upgrade direct digital control systems at several locations.
  • The California Public Utilities Commission, meanwhile, would see some fund reversions including a combined $175 million ($50 million and $125 million) of the amount appropriated for the Broadband Loan Loss Reserve program, as well as another $20 million from the fund appropriated for capacity building grants.
  • CDT would also see a reversion of $38.5 million to the general fund.

This story first appeared in Industry Insider — California, part of e.Republic, Government Technology's parent company.
Eyragon Eidam is the web editor for Government Technology magazine, after previously serving as assistant news editor and covering such topics as legislation, social media and public safety. He can be reached at