Oregon official outlines IT funding, governance options as Vermont considers modernization fund

Sean McSpadden, principal legislative IT analyst with the Oregon Legislative Fiscal Office, told the House Energy and Digital Infrastructure Committee on April 2 that Oregon’s decentralized approach demonstrates both the difficulty of tracking IT spending and some practical tools for oversight and modernization funding.

McSpadden said Oregon estimates about 2,344 classified IT positions across roughly 50 agencies, of which only 254 positions are under direct supervision of the state chief information officer. He said the state spends about $2.3 billion on IT per biennium (roughly 1.8% of all‑funds biannual budget), and that “we estimate about 75 to 80% of that spend is focused in on legacy systems, operations, and maintenance.” He described recurring challenges states face in seeding and sustaining targeted modernization funds and said Oregon uses a set of governance and budget tools—price‑list chargebacks, policy option packages, bonding (Article 11Q), and a joint stage‑gate review process with the legislature—to manage large IT projects.

“I love that term, because it is, the foundation of government operations,” McSpadden said when the committee used the phrase “digital infrastructure,” underlining his point that IT underpins government services.

What Oregon does: McSpadden described the Joint Legislative Committee on Information Management and Technology (a six‑member joint committee) as a statutory body that reviews statewide IT goals and provides project and cybersecurity oversight. For project funding and prioritization, agencies submit policy option packages to request new money, new positions or spending authority; large projects generally exceed $1 million and Oregon currently has 71 major IT projects under joint oversight with an estimated total project budget exceeding $1.2 billion for those projects. Oregon also maintains a price list (chargeback) for shared services; some central services are funded by assessment, others by direct appropriation or fees.

On bonds and cloud services: McSpadden said bonding has been used but is constrained because some cloud‑based costs (ongoing subscriptions and many operational costs) are not bondable. Oregon uses Article 11Q bonds for capitalizable costs and has, in prior biennia, used bonds or certificates for major modernization projects.

Data, procurement and oversight advice: McSpadden urged the committee to ensure source accounting and position coding can reliably identify IT spend categories (he said Oregon historically had difficulty extracting granular IT spend and staff counts from source systems) and recommended a gated oversight model so that large projects move from planning into implementation only after clearly defined milestones and joint executive‑legislative review. He also noted states take different approaches to sustaining modernization funds—some rely on recurring appropriations, some on share‑in‑savings models, and some use dedicated bond programs (Massachusetts cited as a long‑running example).

McSpadden said Oregon is considering a Senate bill (S.B. 90 in Oregon) to create or bolster a technology modernization fund and that he and his committee work with the National Association of State CIOs and other states to compare models. He offered to share materials and follow up with Vermont committee staff.

Ending: The committee heard questions from members about bonding terms, fee‑funded projects, and how obligations for ongoing cloud subscriptions differ from capital projects. McSpadden emphasized that a combination of clear accounting, staged oversight, and an appropriate mix of funding mechanisms (one‑time capital, recurring appropriation, fee revenues or chargebacks) is necessary to make a modernization fund effective and durable.