The State Worker

Outspoken California tax agency tech director resigns

CROS Project Director Eric Steen smiles in his office at the State Board of Equalization tower in Sacramento during an interview. Steen this week resigned his post, effective Sept. 23.
CROS Project Director Eric Steen smiles in his office at the State Board of Equalization tower in Sacramento during an interview. Steen this week resigned his post, effective Sept. 23.

Eric Steen, an outspoken critic of how state government manages IT projects – even while he headed a massive state technology overhaul himself – has submitted his resignation to the Board of Equalization.

The impending departure of the plain-spoken former technology consultant has exposed a rift in the tax-collecting agency’s leadership and a division of opinion among the independently elected five board members about how to proceed with the Centralized Revenue Opportunity System.

In one camp, Steen was viewed as bringing private-sector experience and a no-nonsense sensibility to his role as the CROS project director. To them, Steen is a victim of government culture.

“Unfortunately, entrenched bureaucrats don’t value innovation and results,” board Vice Chairman George Runner, a Republican, said in an email. “It’s my observation that Eric was simply worn out by the obstinance of California’s bureaucracy.”

The other camp, represented by board Chairman Jerome Horton, questioned whether the agency could pull off the project under Steen’s leadership.

“This is the appropriate time to pass the baton to a team of specialists,” Horton said in an emailed statement. “I am confident with the structure in place, the project will continue to move forward.”

Steen’s cordial resignation letter, submitted on Tuesday and obtained by The Sacramento Bee, said nothing about the frustrations of the work or concern over lost support.

“I am indebted to Members, executive staff, and most importantly to the CROS team that I had a privilege to lead and work alongside of over the past four years,” Steen wrote in the letter submitted to Equalization Executive Director Cynthia Bridges, informing her that his last day on the job will be Sept. 23.

Equalization officials declined to make Steen available for an interview.

$4.2 billionTotal budgeted for state government IT projects

The $309 million CROS project aims to expand the tax-collecting agency’s online capacity, streamline operations, improve accuracy and deploy advanced data analysis to find errant tax filers and cheats. As currently planned, it is among the largest, most ambitious IT overhaul efforts in California state government.

And like other projects, CROS has to pass muster with the Department of Technology, which has overseen several struggling or aborted state IT initiatives in recent years that combined have cost taxpayers upwards of $1 billion so far.

In June, Steen publicly blasted technology department officials, including Director Carlos Ramos, for requiring the CROS team to submit a new long-term planning schedule before picking a private-sector contractor. In Steen’s view, the demand by the state’s IT-project watchdog was redundant and would add $2.8 million in costs.

“If this is a harbinger of what’s going to come during implementation, then it’s likely CROS is going to cost a lot more and take a lot more time than it ought to,” Steen told the board at the June meeting. “At best, this is a distraction. At worst, we go down the road to another failed state IT project.”

The public display of frustration by a state IT official about state IT oversight was the last time Steen would publicly address the board.

A few weeks later, The Bee profiled Steen, who said that he was hired as “the throat to choke” if the project went off the rails and that he answered directly to the five-member board. He expressed optimism about CROS, but allowed that navigating government bureaucracy, its business practices and politics made a launch date uncertain.

“Best case, we could be done three years from now,” Steen said at the time. “Worst case, six.”

On July 22, a week after the story ran, Board Chairman Horton sent a letter to Ramos, suggesting that the IT overhaul project itself needed overhauling – from the top down.

After meeting with Ramos and his boss, Government Operations Secretary Marybel Batjer, Horton stated in the letter that the CROS team was making changes and that the board was considering others.

“I plan to recommend that the Chief Information Officer and the Chief Program Officer ... assume leadership roles on the project with a direct report to the Executive Director,” Horton wrote in the letter obtained by The Bee.

Steen’s name was crossed off the July board agenda. Instead, Bridges, the executive director, made the CROS report. At the same meeting, Ramos defended the requirements the technology department had put on the project. The following month, Steen wasn’t on the agenda at all.

On Tuesday, Bridges issued an internal email to staff announcing Steen’s resignation.

“On behalf of BOE management I want to express our best wishes to Eric,” she wrote. “The success of CROS will be a reflection of Eric’s tireless dedication and direct project ownership.”

Board Vice Chairman Runner, however, said Steen’s departure was a serious blow to CROS and a win for bureaucracy-as-usual.

“This is precisely the reason why,” he said, “it will take the BOE longer to stand up a new IT system than it took our nation to send a man to the moon or win World War II.”