COVID crashed NJ unemployment computers. Tech for other state programs is at risk, too
When New Jersey assessed the technology it was using three years ago to power everything from state employee payroll to police dispatch, it found what one expert calls massive neglect.
Many programs were deemed high-risk because they were so old, and in other cases just a single state employee knew how to use them.
As a result, some systems were ill-equipped to handle the surge of information and demand generated by this year's double jolt of a pandemic and an economic tailspin. New Jersey's antiquated system used for unemployment couldn't keep up, and residents who lost their jobs or couldn't work waited, often desperately, for crucial support.
The pandemic laid bare the state's woeful technology — and the direct impact of that on households and family budgets. It's a problem that existed largely behind the scenes, a "ticking time bomb" that has endured despite warnings to state officials to fix it.
During his campaign for governor, Phil Murphy pledged to bolster the state's innovation economy and boost cybersecurity, and was warned to fix tech "choke points" before he took office in early 2018. The Legislature, which approves state spending in each year's budget, has been on notice for decades about aging systems that could cost hundreds of millions of dollars to replace.
But records show only piecemeal projects that fall far short of a complete overhaul.
Even worse, more than a decade ago, taxpayers paid up to $71 million to a private firm to update the unemployment system — but abandoned the project halfway through.
When the overloaded system crashed earlier this year, state officials rushed to fund improvements. But even those changes weren't enough to help residents such as Danielle Centeno of Marlton.
Centeno, a student aide and mother of three, was unable to claim unemployment this summer because the system was stuck recognizing her claim from last summer, meaning she couldn't file a new one.
"They said a claims specialist just has to hit a key to change my claim over to 2020," she said.
Centeno said she tried to claim benefits online three times, called unemployment for weeks, never heard from a specialist, and wasn't able to collect payments for months. Meanwhile, she and her husband deferred their car payments and pulled money out of his retirement plan to stay afloat.
“They've really got to do an overhaul of the system," she said.
Audit shows programs at risk
Before leaving office, Gov. Chris Christie implemented an overhaul of the state's technology staffing and required an inventory of the state's computer applications.
Think of the applications like those on your phone, except these programs power state government functions and services.
The inventory found that of 351 applications, 54% were deemed high-risk due to their age or the attrition of personnel who could maintain them, according to the summary obtained by the Trenton Bureau of the USA TODAY Network New Jersey through a public records request.
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“I’m surprised the number isn’t higher," said Assemblyman Andrew Zwicker, D-Mercer, chair of the Assembly's Science, Innovation and Technology Committee. "When you just keep trying to hold it together with the equivalent of duct tape, I'm not surprised.”
The at-risk apps do a lot of heavy lifting in state government. According to the 2017 inventory, they track and manage emergency response supplies, dispatch state police on calls and track inmates in state prisons.
They power the state payroll and New Jersey's entire financial accounting system.
And COBOL — the 60-year-old programming language the governor blamed when the state's unemployment computers were backlogged this year — is used by many state agencies.
Programs written in Common Business-Oriented Language, or COBOL, connect police to a national crime and wanted persons database, track commercial drivers' records and are launched into action when you do business with the Motor Vehicle Commission. They calculate and process state aid payments to school districts, according to the inventory.
On average, New Jersey's at-risk programs were 18 years old, but some were more than 30 years old, the summary says.
With that in mind, in 2017 — a full decade after the first iPhone put tiny, powerful computers in our pockets — New Jersey set out a plan to modernize.
Few upgrades, fewer details
New Jersey has poured tens of millions into making piecemeal upgrades in recent years, and some investments have been abandoned. Meanwhile, more data has been added to the state's mainframe computers, budget documents show.
Murphy in February recommended $1.2 million to upgrade the state payroll system, but his later budgets omitted that money because the COVID pandemic cut into state revenues. Another $1.5 million is allocated this year to modernize the state budget office systems.
Officials in the Office of Information Technology would not give details about upgrades made since 2017, citing security concerns.
The agency said improvements had been made "in the areas of server hardware, network capacity and redundancy, cloud services, enterprise software applications and security platforms."
Since Murphy took office, the state has spent $3.2 million on major information technology projects, according to public records obtained from the Office of Information Technology, which has to approve any projects that cost more than $50,000.
That figure does not include improvements made by state staff — for example, Treasury staff members have recently moved tax and business records to modern platforms — or work done by the technology office, which has about 600 employees.
At least half of that $3.2 million covered security improvements. One $79,000 project beefed up internet bandwidth because of the surge in traffic to state websites during the pandemic.
As constituents flooded lawmakers' offices with pleas for help this year, Trenton began looking to solutions. The state's current budget included another $4 million for the Department of Labor. And the Senate passed a bill earmarking $50 million for the Labor Department's upgrades, but it hasn't advanced in the Assembly.
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It is uncertain whether that money would resolve all problems, because unemployment is largely funded by federal dollars and reliant on the federal government's antiquated technology. And similar significant investments had been made in the past.
In 2005 the state Labor Department hired the tech firm Accenture in a $40 million, four-year contract to upgrade the unemployment program. Federal funds were used for the contract, and the upgrades allowed more people to claim unemployment benefits online and established a call center.
But halfway through the project, amid the Great Recession of the late 2000s, Accenture said it couldn't do the job for the quoted price, and the two parties — the state and the company — agreed to terminate the project, according to a Christie transition report.
The actual cost of the project exceeded $40 million. According to 2010 testimony in the Legislature it cost $56 million, with all but $3 million coming from federal funds. But state financial records show the Labor Department paid Accenture $71 million in those years.
'Ticking time bomb'
Experts say governments face challenges to make technology upgrades, primarily in finding the talent, attention and money necessary. Leaders in innovation, such as Utah, plan to abandon mainframe computers this year and rely on cloud technology.
New Jersey is not the only state with at-risk computer systems, and many states saw unemployment computers crash amid the pandemic's soaring claims.
Updating the programs is not as easy as downloading the newest version of an iPhone app.
Systems installed decades ago are complicated to modify and have limited flexibility to take on new tasks, said Alan R. Shark, executive director of the Public Technology Institute, an association of state and local government tech professionals that focuses on innovation.
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States also struggle to recruit workers, who can find higher-paying tech jobs at private companies, said Doug Robinson, executive director of the National Association of State Chief Information Officers.
Upgrading systems can take years and needs dedicated, ongoing funding, Robinson said. Modernization costs vary but can be about $50 million for a single program function, and to fully modernize in some states could cost hundreds of millions, he said.
Adding to the cost, the state would need to keep its current systems working while building something better — akin to flying a plane and constructing another one at the same time with the same resources, Robinson said.
A proactive approach from policymakers could avoid public backlash when there are problems like those seen during the pandemic. Shark pointed to 2009, when 30-year-old computers that synchronized traffic lights in a Maryland county failed, creating gridlock during rush hour for days.
There's also public expectation, Shark said, that interactions with the government can take place on user-friendly websites similar to those they are familiar with in the private sector.
Often older systems hum along without much attention, like a car that works fine for errands — but breaks down on a long road trip.
“This is like a ticking time bomb that could happen anywhere when you neglect the maintenance, or you neglect keeping things updated," Shark said. "In today’s world you have to update. Just like we have to buy new phones and new devices, we have to buy new laptops because they’re more secure, and the features are more than just convenience.”
Improvements amid COVID
New Jersey has taken steps this year to make more services available online.
It allowed residents to register to vote online for the first time, joining 39 other states that do so. And the Murphy administration rushed to put more motor vehicle services online as the pandemic made it unsafe to be in crowded public spaces.
"This was a major accomplishment that was up and running in a matter of a few months," Murphy spokesman Michael Zhadanovsky said in a statement.
Facing public outcry related to shortcomings of the unemployment program, Murphy in April promised a postmortem on "how did we get here where we literally needed COBOL programmers."
The state now says no COBOL programmers were brought out of retirement and that fixes were made with in-house staff. COBOL is still widely used in financial transactions, but is considered at-risk because it is no longer being taught and has been replaced in schools by other programming languages.
Murphy's office did not respond to specific questions about when the postmortem would happen, but said the state is "always seeking to improve IT infrastructure and will continue to do so."
Centeno, the Marlton mom of three, said upgrades need to be made.
She said she got a few weeks of unemployment payments in August, but did not get all of the benefits until November — more than four months after she stopped working. By that time, she and her husband had opened three new credit cards to cover expenses and borrowed from his retirement savings.
“I don’t know what we would have done if my husband wasn’t able to take out the money. That was how we survived over the summer," she said.
“Let’s say we couldn’t do that, and I was waiting all this time for unemployment," she said. "Would we have lost our house?"
Stacey Barchenger is a reporter in the New Jersey Statehouse. For unlimited access to her work covering New Jersey’s lawmakers and political power structure, please subscribe or activate your digital account today.