Texas’ IT Systems Need an Upgrade

For far too long, our state government has relied on outdated and archaic IT systems that inhibit efficiency and undercut the quality of services that the government provides to taxpayers. If Texas is going to maintain its competitive edge, we need to upgrade our IT strategy. Fiscal recovery funds made available by the federal government provide the Texas Legislature with a critical opportunity to solve this policy challenge.

During the 87th regular legislative session the Legislature made a down payment on the state’s IT needs by funding a majority of requested IT projects for the 2022-23 biennium. This included $893.4 million in supplemental appropriations for cybersecurity, legacy system modernization, and other priority IT projects. These funds are primarily going to 27 state agencies that identified 59 priority IT-related projects. The funding request for these projects was 86 percent larger than in the previous biennium, which shows it’s becoming more expensive just to maintain the status quo in IT.

Much of that spending will address overdue items that have long needed immediate attention — but will not target long-term solutions for the state. In order to prepare our state government to serve the 10 million new Texans who are expected to live here by 2036, we need a forward-looking IT investment strategy like that outlined in House Bill 4018, by Representative Capriglione and Senator Nelson, which passed during the regular legislative session.

HB 4018 requires state agencies to develop IT and data-related services plans that outline how they will create a more modern, integrated, secure, and effective technological environment. Each agency must submit its plan by October 1, 2022 to the Joint Oversight Committee on Investment in Information Technology Improvement and Modernization Projects, which will report their suggestions for improvements to the Legislature.

HB 4018 also established the Technology Improvement and Modernization Fund. This special fund in the state treasury will be used to update state agency information resources, including legacy systems and cybersecurity projects. It was designed as an avenue to receive federal funds like ARPA and state dedicated revenue when assigned. Texas 2036 anticipates a larger number of requests, both in amount and volume, to come out of the state agency holistic modernization plans and report by the Joint Oversight Committee.

The Technology Improvement and Modernization fund currently sits empty, but Texas 2036 believes this is a perfect use of the State Fiscal Recovery Fund in the American Rescue Plan Act.

As detailed in the first part of our series on federal funds, the American Rescue Plan Act allocates $15.8 billion to the Texas state government from the State Fiscal Recovery Fund. This can be spent in four broad categories — government services being the most flexible of them. The amount the state can spend under the government services category is limited to Texas’ estimated revenue loss due to the pandemic, which we estimate at $12.2 billion.

An allocation of $1 billion or more from these funds would have a transformational impact on Texas’ IT systems, ensuring that our state has the IT systems and infrastructure necessary to support our growing population and economy into the future.

This is an ideal time to target long-term solutions. By deploying available fiscal recovery funds in a targeted manner, we can ensure Texas is at the forefront of technological advancement. Instead of achieving the bare minimum, we can set up every agency — and every Texan — for success.

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