HHS seeks $10 million to retire legacy IT systems; executive budget includes $9.8 million for staffing and large IT cost-to-continue

Deputy Commissioner Sarah Stolt told the Appropriations — Human Resources Division committee that the executive budget includes a one-time request of $10,000,000 — $5,000,000 federal and $5,000,000 from SIF — to retire legacy technology systems used by the Department of Health and Human Services.

"We do have in the executive budget a 1 time funding request for $10,000,000 — $5,000,000 of that is federal and $5,000,000 is SIF to retire the legacy systems," Stolt said. She said the legacy systems include older systems that still house data even after implementation of the new integrated eligibility system and parts of the Medicaid management system.

Stolt summarized other decision packages the executive included: an operational underfund restoration, a $9,800,000 increase to the department's FTE block grant to support new positions and salary payouts, a $190,590 rate increase to cover Office of Administrative Hearings and Attorney General costs, and an IT contractual cost-to-continue request that the department described in round figures as roughly $21,000,000.

Committee members and staff emphasized the cost of continuing to maintain the mainframe if replacement work is delayed. Donna Auckland, who presented the business operations figures, said the department is paying roughly $9,100,000 in mainframe maintenance and hosting costs in the projection for the upcoming biennium and described the $10,000,000 ask as intended to reduce those ongoing costs over time. A committee member noted an operating pass-through and vendor contract structure with the state's IT office.

Stolt and Donna Auckland also told the committee the department is tracking budget impacts from other bills; the department's point-in-time list of fiscal notes and impacts on HHS totaled about $227,000,000 as of Jan. 26.

No formal votes or motions were taken during this presentation. Committee members asked follow-up questions about funding sources and timing; Representative Murphy asked whether the $5,000,000 portion was SIF, and Stolt replied, "Yes. That is SIF funds." Committee members also pressed for details on whether maintenance costs would be avoided if the retirement is funded and how long migrations would take.

The department said the mainframe transition will be multi‑biennial for some systems; even after removing major systems, legacy data storage and dependencies will remain and require additional work and funding.

What happens next: the committee will consider the executive recommendation along with other decision packages during the budget process; the department asked for the one-time and ongoing amounts described at the hearing.