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California Budget Makes Room for Innovation Office, DMV

The state’s budget could be finalized at any moment between now and Saturday, but as it stands, some major technology initiatives seems to be getting the financial attention leaders were after.

The state’s 2019-2020 budget should contain funding for several of Gov. Gavin Newsom’s key tech projects — but which projects and exactly how much money won’t be certain until the Legislature adopts it, by Saturday, as required by law.

The new fiscal year begins July 1 with, for state government, an emphasis on tech that’s undeniably more urgent than under Newsom’s predecessor, Jerry Brown. And Newsom, who wrote a book on tech, Citizenville: How to Take the Town Square Digital and Reinvent Government, and is considered by some to be the tech governor, is getting the funding and staffing he sought from the Legislature in at least three areas. Here’s what is known, following a budget adoption Sunday by the California Legislature’s Conference Committee on the Budget:

• Newsom should largely get the Office of Digital Innovation (ODI) he proposed in January. The budget can still be amended, but committee members approved giving ODI 50 positions, 20 of which will be exempt. The budget in print also allocates more than $26.1 million to stand up ODI — although $10 million of that is provided in a revolving fund “to assist entities.” The fund could be tapped by ODI as needed for purchases, and replenished in turn by billing state agencies for its services. That’s a far cry from the $10 million and 10 people recommended last month by an Assembly subcommittee. Techwire should have more ODI specifics later this week.

• The Department of Motor Vehicles’ (DMV) budget appears to have also fared well, according to committee documentation. Members approved $242.1 million in FY 2019-2020 and $199.8 million in FY 2020-2021 for Real ID compliance and DMV reform and improvement, both amounts sought by Newsom. The committee approved spending just under $17 million in FY 2019-2020 and around $8 million in FY 2020-2021 on IT improvements. It also approved spending around $14 million in FY 2019-2020 and around $10 million in FY 2020-2021 on expanding a customer relationship management (CRM) live-chat system.

But the budget calls on DMV to provide monthly reports on “any technology outages in field offices” and on its progress in hiring a permanent director. The budget requires monthly reports on any additional money needed to meet Real ID workload demands; the number of Real IDs processed; and a “projection of the number of Real IDs” DMV estimates will need to be processed by the Oct. 1, 2020, federal deadline — and through the end of calendar year 2020. In an interview with Techwire, state Sen. John Moorlach, R-Costa Mesa, a committee member, criticized DMV for having “failed to get in front of” the Real ID rollout, but suggested technology may show the way forward.

“Let’s take advantage of whatever IT technology opportunities we have,” Moorlach said. “Make it simple; make it fast. There’s no reason why we can’t do what the private sector’s doing. And we should be outsourcing more. How do we utilize the Auto Club more effectively, and how do we incentivize opportunities for others to be subcontracted?” 

• A new wildfire tech procurement tipped in February continues to have funding proposed in the budget’s May revision. The committee approved a one-time $15 million General Fund increase to “enable Cal Fire [the California Department of Forestry and Fire Protection] to procure innovative solutions to combat the state’s wildfire crisis.” The effort is guided by Newsom’s Jan. 8 executive order mandating “a new flexible approach to procurement called RFI2 or Request for Innovative Ideas.”

The funding targets “contracts for one or more Proof of Concept vendors,” and can be augmented by the state Department of Finance by up to $35 million. However, the budget in print indicates Cal Fire shall not enter into procurement contracts for the solutions with cumulative ongoing yearly costs of more than $10 million “until the necessary funding has been approved by the Legislature through the regular budget process.”

• Sunday’s vote, by a 10-member bipartisan committee, melded Democratic and Republican thought, with certain areas referring to “Conference Compromise.” Following the committee’s vote, the budget went into print Monday morning. It must remain “in print” for three days, after which time — mid-morning on Thursday — the full Legislature will have until day’s end Saturday to approve the budget. Then, it will head to Newsom for a signature.

In a statement Sunday, Newsom said he appreciated the committee’s hard work in approving a budget that “is balanced, creates historic reserves and expands budget resiliency.”

“It also invests in emergency preparedness and response, provides sustainable funding for safe drinking water, and includes important funding augmentations to address the cost crisis in our state — tax cuts for small businesses and working families, expanded health care subsidies, historic funding for our schools and funding to serve more students at UC and CSU,” Newsom said. A representative of the governor’s office told Techwire via email that the agency had “nothing further to share.”

This article was originally published by Techwire, Government Technology's sister publication.

Theo Douglas is assistant managing editor for Industry Insider — California, and before that was a staff writer for Government Technology. His reporting experience includes covering municipal, county and state governments, business and breaking news. He has a Bachelor's degree in Newspaper Journalism and a Master's in History, both from California State University, Long Beach.