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FY20 Budget: Key Takeaways, and What They Mean to You

|June 13, 2019|

As you probably know, it’s the time of year in which the state budget takes center stage. The FY20 budget, which has now been approved by the legislature and Governor Doug Ducey, was mostly to be expected. While there were no wild surprises in terms of technology appropriations this year, there were still some unexpected twists and turns regarding funding allocation and budget footnotes.

Take a look at my blog post today, in which I provide an overview of the budget, as well as more in-depth information about the funding of technology-related projects.

After a week of tense negotiations, the legislature passed - and Governor Doug Ducey approved - an $11.8 billion budget package, the largest in Arizona history. This package represents a 10% increase in expenditures from 2018. If you tracked last year’s budget, you will see quite a few similarities. Similar to the 2018 session, legislators made significant investments in K‐12 education, public safety and healthcare.

For technology-related projects, here are a few of the big takeaways from the FY2020 budget, and what they mean.

Oversight Remains High

Consistent with previous years, the budget includes enhanced reporting for a number of agency projects. From requiring the Department of Transportation to report on the MVD Modernization System’s performance and costs, to describing all current and future automation projects at the Administrative Office of the Courts, agencies will be held accountable.

ACA Scores in Emerging Technology

The Arizona Commerce Authority (ACA) is the economic development arm of state government. While not called out in the ACA’s initial budget request, the FY20 budget allocates over $5 million in funding to support initiatives and research in a number of emerging technology areas, including blockchain, rural broadband, wearable technology and automated mobility. The ACA also received funding to operate new trade offices in Mexico and Israel. This is a big win for organizations like the Arizona Israel Technology Alliance whose mission is to increase and support business and bilateral trade between Arizona and Israel.

ASET Gets Thumbs Up Overall

The Arizona Strategic Enterprise Technology (ASET) division within the Arizona Department of Administration (ADOA) provides the centralized IT oversight and strategy for state agencies. ASET also happens to be the “home” of the state CIO, Morgan Reed. ASET requested a number of appropriations to continue important work on data management, cybersecurity and digital services. Notably, ADOA also received an increase in the contribution state agencies, legislature and judicial branch must make to pay their share of the overall cost of information technology services provided by ADOA. 

However, some projects were not completely funded, most notably for the creation of a new Cyber Risk Fund to provide financial and operational assistance against the liabilities associated with a potential data breach. While Arizona has been a national leader in driving best-in-class, enterprise-wide security standards, the danger of a data breach remains real. 

Here are the some of the FY20 IT line items:

  • Enterprise email costs ($5.4M)
  • Statewide cybersecurity controls and operations ($6.35M)
  • Digital government services ($250K)
  • Business one-stop assessment ($1.0M)

Remaining Legacy System Replacements Continue

The FY2020 budget protects the majority of large-scale IT projects currently underway across state agencies. Most of these projects began several years ago when the state established a special fund – the Automation Projects Fund – dedicated to implementing, upgrading or maintaining automation and IT projects for any state agency. Two notable appropriations include $10.1 million to the Department of Child Safety to continue the replacement of the CHILDS system and $3 million  to the Department of Education to support its efforts to replace the school finance system.

Public Safety Remains a Focus

Among this year’s IT funding winners is the Department of Public Safety. The department received $2.3 million to assist with completing the Criminal Justice Information System replacement – the central repository to collect, store and disseminate Arizona criminal justice records. The department also received $400,000 to help modernize the mainframe-based concealed weapon permit IT system. The surprise was that the legislature included a new Public Safety Interoperability Fund for “interoperable communication systems” with a $1.5 million beginning balance.

Don’t Forget The Footnotes

As we’ve all learned, the devil really sometimes is in the details. The FY20 budget bills include a number of footnotes to guide agency operations across all programs. Footnotes in this year’s budget include:

  • Restricting the per-user monthly fee for enterprise email and calendar service to $10.42
  • Requiring the ACA to submit a plan for distributing rural broadband development grants
  • Mandating that the Department of Transportation submit an annual report on improving motor vehicle division wait times and vehicle registration renewal by mail turnaround times
  • Increasing ASET’s oversight of the planned replacement of the child support IT system by the Department of Economic Security

Agencies can Still Pursue Additional IT Projects

Please remember, the Automation Projects Fund and projects listed above represent a slice of the IT investments occurring statewide. Provided that they have the funding, agencies are free to pursue other IT projects either by purchasing off an existing contract, or by procurement.

Stay tuned for more updates and tips on IT projects and procurement as the new fiscal year kicks off on July 1, 2019.

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