California EDD outlines $124M funding for modernization and fraud prevention initiatives

The Budget and Fiscal Review Subcommittee No. 5 of the California State Senate convened on April 3, 2025, to discuss critical funding requests and modernization efforts within the Employment Development Department (EDD) and the labor agency's relocation plans.

A significant focus of the meeting was the funding request for the relocation and decommissioning of the labor agency's new workspace, which is projected to cost approximately $2.6 million. This move will accommodate around 3,000 staff members and is expected to result in a net increase in building lease costs over the next several years, totaling $7.8 million for the 2025-26 fiscal year and escalating to $17.9 million by 2029-30. Each department will contribute to these costs based on their space usage, with the relocation phased to begin in December 2025.

The EDD modernization initiative, known as EDD Next, was another key topic. The department is seeking $124.2 million to continue its customer service improvement efforts, which include enhancing technology and processes to better serve Californians. The modernization aims to streamline operations, reduce wait times, and improve customer interactions through new systems, including a shared customer portal and upgraded contact centers. EDD officials highlighted that these improvements are essential for addressing the outdated systems that have been in place for decades.

Concerns were raised by committee members regarding the pace of these modernization efforts and the significant financial investment involved. Questions about the effectiveness of the current systems and the transparency of vendor selection processes were also discussed. The committee emphasized the need for increased oversight as the EDD enters a critical phase of its technology upgrades.

In conclusion, the meeting underscored the California government's commitment to improving labor services through significant investments in infrastructure and technology, while also highlighting the challenges and scrutiny that accompany such large-scale initiatives. The EDD's modernization efforts are seen as vital for enhancing service delivery, especially in light of lessons learned during the pandemic.