States Spending More than $3 Billion On Y2K Problem

WASHINGTON - To assure that their computer systems are Y2K-ready as of next New Year's Day, 43 states are spending more than $3.3 billion. That doesn't include what Arkansas, Oregon, North Dakota, Wisconsin, Oklahoma, West Virginia and Vermont have earmarked to ward off the millennium bug. None of those states reported their cost assessments to the National Association of State Information Resource Executives (NASIRE).

To put the $3.3 billion for Y2K fixes in perspective, the sum surpasses the combined Gross National products of South American countries Guyana ($1.8 billion) and Suriname ($1.4 billion).

Put another way, the outlay would have snagged the 50 passenger jets China ordered from Boeing two years ago for $3 billion, buying a jet apiece for all 50 states. Or covered the $3.2 billion Dow Corning Corp. paid to 400,000 recipients of silicone breast implants last year.

It matches the $3.3 billion Microsoft founder Bill Gates donated to charity in January.

Among the 43 states that disclosed their Y2K expenditures, the leader was Georgia, which is shelling out $322 million to keep 911 emergency telephone service, fiscal operations and other systems working smoothly at the turn of the millenium.

The most populous state, California, is next at $317 million, followed by New York ($260 million), Texas ($257 million), Virginia ($195 million), Connecticut ($148 million), North Carolina ($127 million) and Illinois ($125 million), according to NASIRE.

At the bottom end of the range are Nebraska, which says it needs $20 million to stamp out the millennium bug, Maine ($18 million), Alaska ($17 million), Idaho ($16 million), Tennessee ($16 million), New Mexico ($7 million), Nevada ($6 million), Delaware ($6 million), Montana ($6 million) and South Dakota ($5 million).

In Colorado, an assessment of the money needed to become Y2K-safe dropped from $40 million in 1997 to $35 million, a pleasant development for Brian Mouty, who directs that state's commission on information management.

"The surprise is that it didn't increase substantially," Mouty says. "I expected a (budget) growth of 30 to 40 percent."

Contract labor has been responsible for $20.5 million of Colorado's millennium bug expenses, according to Mouty. It went to outside contractors handling matters such as systems tests, analysis and the tedious task of examining millions of lines of programming code for potential Y2K glitches.

When the various agencies that comprise Missouri's state government approached the legislature for Y2K funding, it wasn't with an empty hat in hand. "We expected them to throw some skin in the game," Mouty says of the agencies, which told legislators how much they were contributing to the Y2K pot and how much more was needed to finish the job.

That made lawmakers far more receptive to Y2K requests than if they had been asked to foot the entire bill, Mouty says.

What states are spending to battle the millennium bug varies so dramatically because of population, the amount of hardware and software to be fixed, and its age.

Georgia leads the pack because it had a number of older PCs to replace, software that in some cases was 15 years old, and because it also did extensive work for its board of regents and university system, says Erwin Fraas, with Georgia's Information Technology Policy Council.

"Rather than try to patch some of the systems up, it was more cost-effective to replace them," Fraas says. So the Peach State not only gets Y2K inoculation, but also gets new hardware and software in the bargain.

Most of the money is coming from the state's coffers, but there is also a federal contribution for computer systems dealing with welfare and Medicaid, Fraas notes.

And as is the case in each state affecting Y2K fixes, much of the work is being farmed out to the private sector. The cost per hour can range from $50 to 200, based on the task being handled, Fraas says.

Georgia's information system gurus have worked smoothly with the legislature on the issue of funding, but that hasn't been the case in all states. Last year, Wyoming's legislature refused to earmark any money for the state's Y2K fixes.

With only nine months left to fish or cut bait, Wyoming lawmakers relented in March, appropriating $10 million toward an issue that the state says it needs $29 million to tackle.