House Finance hears FY26 capital priorities; $7 million payroll system request leads discussion

A House Finance Committee hearing on the governor's proposed fiscal 2026 capital budget on a January Thursday centered on a $7 million request to implement a statewide time-and-attendance management system intended to improve payroll for about 14,000 executive-branch employees.

"The $7,000,000 is going to address system needs primarily," said Eric Demolen, identified in the hearing as the Department of Administration's admin services director. Demolen told the committee the figure is an initial estimate based on requests for information and that further definition of scope will be required before a firm contract price can be set.

The administration said the new module would not replace the state's system of record, IRIS, but would function as a time-and-attendance module that interfaces with payroll. "It will basically interface in or be integrated with the payroll system itself. So it's not replacing our current assets, it's adding to," Demolen said. Committee members pressed on whether hardware and staffing needs are covered; Demolen said payroll staff are "fully provisioned" with recent tablet-style laptops and that the $7 million estimate reflects the best available information from vendors at this stage.

Representatives asked whether the system will re-centralize payroll work that some agencies now manage themselves. Demolen said the intent is to build a consistent, adoptable solution across agencies but did not commit to shifting specific functions back to the Department of Administration. On potential connections with other systems, Demolen said the project team will account for stakeholders such as the Division of Retirement and Benefits' new system to avoid creating interoperability problems.

Sanders framed the request as part of several capital priorities presented to the committee. During questions on other items, committee members pressed agency staff for additional project detail and documentation.

Commerce: Whittier shore power and 'Ocean Ranger' receipts

The committee also scrutinized a Commerce, Community and Economic Development request that would use Ocean Ranger receipts to complete shore-power infrastructure at the Whittier cruise-ship terminal so visiting ships can plug into shore power and shut down engines while docked.

Hannah Lager, administrative services director for the Department of Commerce, said the project has a history of mixed public and private funding. She told the committee her recollection of earlier contributions: a prior $5,000,000 appropriation from the commercial passenger vessel fund, about $6,000,000 contributed by Holland America as a private party and roughly $1,000,000 from the community of Whittier. Lager said she could not confirm, during the hearing, the legal ownership of the dock and offered to follow up with documentation.

Representative Reggie Hannon (transcript: Representative Hannon) asked whether the state risks effectively subsidizing upgrades that benefit a single cruise line. "I just wanna make sure that we are not creating a favoritism to 1 line and 1 dock project at the exclusion of other docks that may serve multiple lines," Hannon said; Lager replied staff would provide the committee a spreadsheet of fund history and the documentation on agreements.

What the committee asked for and what remains unclear

Committee members repeatedly asked for written back-up and clarifications. Sanders and agency witnesses agreed to provide spreadsheets and follow-up material on: a) the exact funding history for the Whittier electrification project and any vendor or private agreements tied to dock use; b) more detailed scope, procurement plans and vendor responses (RFI/RFP status) for the time-and-attendance project; and c) the fund balance and long-term availability of the Oil and Hazardous Prevention & Response Fund and the Ocean Ranger receipts account cited in the presentation.

Other agenda highlights (brief)

Sanders also flagged a set of other capital requests the committee will consider in coming days, including: additional funding to complete a produce-processing plant at Point MacKenzie Correctional Farm (the department previously received a smaller infrastructure appropriation), a request to build a booking/intake area at Highland Mountain Correctional Center, continued funding for salmon research and monitoring programs and a request to replace or add aircraft for public safety and wildland response. Committee members asked for additional detail on these items and for long-term maintenance and operating-cost estimates where acquisition requests were proposed.

The administration emphasized the budget presentation was a starting point and said it will work with House Finance to provide further documentation and to refine project scopes and funding sources during the committee process.