Waking Virginia From An IT Budget Nightmare

Virginia could pose as the poster child for a dysfunctional IT organization. Since 1996, the state has spent more than $560 million on duplicative computer systems, a colossal amount considering its fiscal 2003 IT budget doesn't exceed $450 million. And, for the next two years, state agency officials have proposed implementing 13 financial-management, three payroll, and three human-resources systems.

Gov. Mark Warner has had enough. "This is no way to run a business," says Warner, a former IT venture capitalist who took office in January. "And state government will not move forward in this manner. We will choose the route of streamlining, efficiency, and accountability."

Warner has proposed merging three cabinet-level departments and two boards into a single agency--the Virginia Information Technologies Agency--a move the governor contends will save taxpayers tens of millions of dollars a year. Secretary of Technology and state CIO George Newstrom would head the new agency.

Warner administration officials estimate the cost to consolidate the departments at $14 million, but the move should result in a $23 million savings after one year.

Warner, a Democrat, has support among Republicans, who control the Legislature. Delegate Joe May, a Leesburg Republican and chairman of the Legislature's Joint Commission on Technology and Science, predicts likely passage of an IT-consolidation plan.

If so, Virginia would be among the few states--Georgia and Michigan are two others--that have truly centralized IT administration, says Cathilea Robinett, executive director of the Center for Digital Government, a research and advisory company that focuses on state and local governments. What's unique about Warner's proposal is that it would codify the centralization of IT in state law. In Michigan, for example, a gubernatorial executive order established a centralized IT administration. Future governors could rescind that order. "You have to institutionalize the move or else it could be politicized," Robinett says.

Warner's plan to merge IT operations comes when the state faces a $1.2 billion budget deficit. "By achieving reforms now, when times are tough," Warner says, "we'll emerge from this recession stronger, with a more efficient state government."