IT Modernization Fund

On Tuesday, the Joint Fiscal Office (JFO) gave the Senate Finance Committee an overview of the IT Modernization Fund, which has historically been supported by an internal service charge (a fee charged to each agency of department based on their overall budget). The Governor’s budget this year recommended that it be its own line item in the budgets for each fund (General Fund, Education Fund, Transportation Fund, etc.) in order to be more transparent.

Fund supports IT projects and systems maintenance at the Department of Taxes. Craig Bolio (Tax Commissioner) explained to the Committee how the fund works and what it is used for. One of the most notable projects supported by the fund was the VTax system, which he described as being hugely successful.

The fund is set to sunset at the end of the current fiscal year. Maintaining their software systems costs around 20% of the Department’s budget, so if nothing is done this year, it’s a significant overnight cut to their department.

The House picked up the full $3.7M cost for the Fund out of General Fund Revenues but the Senate Appropriations Committee agreed with the Governor and split the spending between the General and Education Funds, with $1.1M in the Education Fund and $2.6M out of the General Fund. JFO explained that this is why the Committee will now see it show up on the Education Fund Outlook as a line item.

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