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EDD asks for $20M to finish document management system as DI/PFL costs rise by $2.3 billion
Summary
Employment Development Department asked the subcommittee to fund an expanded Document Management System and reported a $2.3 billion upward May Revision to Disability Insurance and Paid Family Leave benefit estimates for 2026–27, driven mainly by SB 951 changes to wage replacement and higher average weekly benefits.
The Employment Development Department requested $20 million in the May Revision to continue the EDDNext Document Management System (DMS), and reported a large mid-year upward adjustment to Disability Insurance (DI) and Paid Family Leave (PFL) benefit estimates.
EDD admin deputy director Caleb Orell told the Assembly that the DMS request is needed to incorporate remaining tax forms and related functionality into the project and avoid maintaining parallel legacy systems. "If all tax forms and functionality are not incorporated into the overall DMS project, it would present significant risks to the department and the overall modernization effort," Orell said. He said the DMS project's total cost will rise to about $117 million after adding the May Revision request.
On benefits, the department said the May Revision increases DI and PFL benefit estimates by $2.3 billion for 2026–27 and by $1.3 billion in the current year. EDD attributed most of the change to SB 951, which raised wage replacement rates and expanded eligibility for higher replacement amounts. "Post SB 951, [eligible claimants] could now be eligible for that 90% wage replacement rate," an EDD official said, adding that the department is also seeing roughly a $200 increase in the average weekly benefit amount compared with prior forecasts.
The Legislative Analyst's Office flagged the size of the DI/PFL adjustment as notable and recommended further probing; EDD said the increase reflects both higher benefit rates and somewhat higher participation (roughly an observed 6–7% increase in first claims vs. a prior 5% estimate).
The committee also discussed EDDNext's customer-facing benefits: the department said earlier releases have reduced processing time by scanning documents and extracting data automatically, allowing quicker downstream certification and payment steps. "We have implemented AWS Textract... with over 98% accuracy," an EDD representative said, describing faster processing of forms for unemployment, DI and PFL.
No vote was taken; the subcommittee held the package open for additional review and follow-up questions about benefit drivers and DMS scope.
Ending: The subcommittee left the EDD May Revision items open for further analysis and directed staff to follow up on the DI/PFL increase and project oversight questions.
