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Legislative staff review nonbudget proprietary funds, subsequent injury fund and proposed IT internal-service rates for Labor Department
Summary
LFD and department staff briefed Section A on nonbudget proprietary funds including the subsequent injury fund and the department’s technology services internal-service funds; the executive proposes rate increases that the legislature will review.
Legislative Fiscal Division and department staff presented the committee with a review of nonbudget proprietary funds for the Department of Labor and Industry, focusing on the subsequent injury fund and the department’s technology services internal-service funds.
LFD said the subsequent injury fund is a proprietary account that offers incentives to employers to hire persons with disabilities by reimbursing paid losses; the fund’s assessment rate is based on prior-year paid compensation and prior subsequent-injury payouts. LFD reported that the fund expended about 68% of its FY24 appropriation and that FY25 appropriations mirror FY24.
On technology services, staff explained two internal service funds: the Technical Services Fund (which pays for staff who develop and test department applications) and the Technical Services Direct Fund (which passes through enterprise IT charges to the State Information Technology Services Division, SITSD). The executive is proposing increases to the proprietary rates for both internal funds to cover personal-services costs and pass-through SITSD charges. LFD said the legislature reviews and votes on enterprise/internal-service proprietary rates.
Department staff emphasized that the department completed large technology modernizations in recent years and that ongoing maintenance contract funding is necessary to preserve those investments. The department also described a cross-agency example: for about $100,000 in development fees the department created a walled-off Acela environment to host a Department of Agriculture pesticide applicator licensing workflow, with annual licensing fees to the Ag program of roughly $20,000–$25,000 thereafter.
Ending: Committee staff indicated the committee will consider the internal-service proprietary rates during executive action; no final legislative rate decision was made in the hearing.
