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OIT tells JBC real‑time billing created cash‑flow volatility; department seeks supplemental true‑up and targets 30‑day cash reserve
Summary
OIT described progress reducing technical debt but said its Information Technology Revolving Fund requires a large one‑time real‑time billing supplemental and a target 30‑day working capital balance to avoid borrowing costs; the department proposed $14.5M in credits to agency IT lines and identified $11M JBC‑initiated transfer to help rebalance the fund.
The Office of Information Technology told the Joint Budget Committee it has completed major technical‑debt projects (hosted mainframe migration, decommissioned an expensive data center, patched tens of thousands of vulnerabilities) but that cash‑flow mechanics for the Information Technology Revolving Fund require careful management.
OIT explained that real‑time billing — introduced to align agency charges with actual consumption and to improve transparency — produces timing differences between expenses and collected revenues. Those timing differences can leave the fund short on cash early in a fiscal year and force OIT to borrow from the State Treasury, which generates interest expense. The department presented monthly cash‑balance graphs showing large July declines and said the fund should carry a 30‑day working capital target to avoid rolling borrowing costs.
True‑up requests: OIT proposed a FY26 real‑time billing supplemental credit of $14.5 million to decrease agency payments this year and bring the fund balance closer to the 30‑day target, plus a JBC‑initiated transfer of roughly $11 million from the IT revolving fund to the general fund as part of budget balancing. Combined with projected revenue/expense dynamics, OIT forecast the fund balance would decline by roughly $36.6 million absent offsets and that the proposed supplemental and transfer would move the fund toward the department’s target reserve.
Committee questions and options: Members queried alternatives such as billing in advance, monthly truing‑up, or changing when OIT invoices agencies. OIT said billing in advance could reduce cash risk but might blunt the behavioral and transparency benefits of real‑time billing. The department agreed to provide more frequent reporting to the Joint Technology Committee and to continue improving estimates that inform rate setting and supplemental calculations.
Next step: OIT will work with JBC staff and the Joint Technology Committee to refine rate estimates, pursue the supplemental process for FY26, and provide more regular fund balance reporting to the Joint Technology Committee.
