A tight fiscal situation in Virginia is making it more important than ever for the state to find alternative funding mechanisms, a top state technology official said.

The state wants vendors to propose self-funded or revenue-generating financing models, said Jerry Simonoff, director of information technology investment and enterprise solutions with the Virginia Information Technologies Agency. He spoke to attendees at Input Inc.’s State and Local MarketView Conference Tuesday in Vienna, Va.

Virginia Governor Tim Kaine has projected a revenue shortfall of $300 million for the state in fiscal 2007 and is scaling back previous revenue growth projections for fiscal 2008, according to media reports.

On the whole, it is difficult for many IT projects to get appropriations from the state’s general fund, Simonoff said. “The more we can see to make these projects self-funded, the more likely they are to [proceed],” he said.

Self-funded models for IT projects are already an integral part of the IT strategy in the Old Dominion. Virginia is well into the first year of a program to modernize the state’s IT infrastructure with Northrop Grumman Information Technology of McLean, Va., through a 10-year, $1.9 billion public-private partnership. Simonoff said the state expects to save $200 million by gaining operational efficiencies through new technologies.

Northrop Grumman is willing to use additional companies on the project if they have technology products or solutions that can enhance the transformation, Simonoff said.

Companies are more likely to get on board such projects by bringing specific ideas to the table rather than simply presenting their credentials, he said.

Meanwhile, Virginia Finance Secretary Jody Wagner will make a presentation to the state’s IT Investment Board on July 19 for proceeding with a statewide enterprise resource planning project that the state is developing with CGI of Fairfax, Va. If the board approves the project, the state is likely to proceed with a phased implementation and issue a solicitation for ERP software, he said.

Agency IT projects, with cost estimates that have been approved for planning include:

• $45 million unemployment insurance modernization by the Virginia Employment Commission;
• $8.3 million central criminal repository improvement by the state police department;
• $3.4 million automated child care subsidy payment system by the social services department;
• $2.5 million customer management queuing system by the motor vehicle department; and
• $720,000 electronic health record pilot by the health department.