Vermont to replace 55-year-old unemployment insurance mainframe; $30 million vendor contract underway

On Feb. 25 the House Energy and Digital Infrastructure Committee heard from the Vermont Department of Labor and the Agency of Digital Services (ADS) about a multi‑year project to replace the state’s 1970‑era unemployment insurance mainframe.

The modernization is funded primarily from a legislative appropriation and state IT modernization accounts. "It was a $30,000,000 project," Michael Harrington, commissioner for the Vermont Department of Labor, told the committee, adding the vendor contract is "slightly under $30,000,000" while the five‑year lifecycle cost rises to about $42,000,000 when ongoing maintenance and staff costs are included.

The project replaces two core functions: employer tax collection (the tax side) and benefit adjudication and payment (the benefit side). The department said the current mainframe, first deployed in 1970, has frequent…