States seek IT funding schemes

NASCIO

Massachusetts has issued bonds for funding technology projects governmentwide. Texas partnered with an integrator to build its portal at no cost to the state. Tennessee has a separate information technology fund set aside for developing applications and buying hardware.

As states face funding challenges, chief information officers are looking for new ways to pay for IT projects across their governments. To help share best practices, the National Association of Chief Information Officers (NASCIO) this week released a draft report containing case studies of how some states secured funding.

"This paper is not intended to be a how-to guide," said Mike Langehr, former Maryland CIO and currently government services vice president for Crestone International Inc. But he said the paper is intended to help CIOs make "fewer false starts" when trying to fund projects.

The report, "Trends and New Approaches in Funding Technology," was spearheaded by NASCIO's Corporate Leadership Council at the bequest of NASCIO President Gerry Wethington. The council surveyed state governments and received 23 responses.

"Never before have governmental agencies pursued the degree of collaboration that exists today," the paper says. It contains five case studies from Minnesota, Ohio, Texas, Tennessee and Massachusetts. Representatives from four states outlined their approaches during NASCIO's annual conference, held this week in Scottsdale, Ariz.

For instance, Carolyn Purcell, who recently retired as CIO of Texas, said her state partnered with BearingPoint Inc. to build a portal at no cost to the state. The company would recoup its investment through convenience and subscription fees levied on certain applications. Texas and the company share revenues generated from the fees.

On the other hand, Tennessee for 15 years has had a Systems Development Fund that provides loans to state agencies for projects of about $100,000 or more. Loans must be repaid generally within five years.

"The projects we look to support have already gone through a rigorous cost/benefit analysis," said Richard Rognehaugh, Tennessee's CIO. He said he hopes the fund will grow from the current $45 million to about $60 to 75 million in the next few years.