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Committee advises governor to approve $4.7M OST loan for ServiceNow implementation

Arkansas Legislative Council (ALC) · February 17, 2026

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Summary

The committee advised the governor to approve a $4.7 million Budget Stabilization Trust Fund loan to the Office of State Technology to implement ServiceNow for IT service management. OST officials said projected cost savings are expected but not yet quantified; repayment will be by OST rates over a five-year maximum term.

The Legislative Council advised the governor to approve a $4.7 million loan from the Budget Stabilization Trust Fund to the Office of State Technology (OST) to implement a consolidated IT service-management platform (ServiceNow).

Committee staff said the loan request (E1) is intended to consolidate IT tools, modernize applications and realize cost savings through license consolidation and enterprise portfolio management. James Caldwell, CFO for Shared Administrative Services, said projected cost savings "we expect to come later" and that the office does not yet have a quantified savings projection. Jay Harden, director of the Office of State Technology, said the loan will fund implementation of ServiceNow modules including enterprise portfolio management, business continuity and disaster recovery, and governance, risk and compliance functions tied to cybersecurity.

Harden described a state inventory of roughly 5,000 applications and cited other states that reduced application counts substantially after consolidation. OST said the new loan will replace a maturing ADFA loan and will be recovered through OST rates charged to state agencies; per code, the maximum payback period for such a loan is five years. Senator Hickey pressed whether cost savings alone would repay the loan and whether the loan is "evergreen"; OST and CFO representatives said the loan replaces an existing payment obligation and will not require a rate increase because payments are lower than the prior loan.

Senator Ervin moved for favorable advice to the governor; the motion passed by voice vote. Committee minutes record approval by voice ('Aye', motion carries).