Imagine a typical day in the life of California CIO J. Clark Kelso.The state department of IT that Gov. Gray Davis picked him to clean up? Disbanded. The state\u2019s budget? A $100 billion mess, balanced through billions in borrowing, slashed spending and new fees. And his job security? As far as Kelso knows, Arnold Schwarzenegger soon could be his new boss, thanks to a free-for-all gubernatorial recall vote set for Oct. 7. And that\u2019s if the new governor keeps him on. (Adding to the chaos: On Sept. 15, a court ordered the vote delayed until March.)But Kelso, a Sacramento insider with a reputation for turning around departments in turmoil, says it\u2019s all just politics as usual. "The mass media coverage is all about what a circus it is out here," says Kelso, a McGeorge Law School professor who has helped revive the state\u2019s earthquake relief agency and insurance commission. "On the inside, you don\u2019t have the sense that the government is in utter chaos."Crisis is a better word for California\u2019s administration, a situation that extends to IT. Aside from the state\u2019s first-ever recall election, California must shore up its finances against another mammoth budget deficit next year (the deficit hit $38.2 billion this year before a July budget deal). In the midst of this, Kelso tries to move ahead with his IT agenda designed to cut costs without hurting services. He\u2019s drafting a data center consolidation plan due Dec. 1, to implement in 2004. His administration is overseeing an $800 million contract for IBM and other vendors to build a new system to administer child support payments. And since he became CIO in 2002, Kelso has been pursuing a statewide initiative to cut costs by improving interagency collaboration on the state\u2019s MyCalifornia Portal (www.my.ca.gov). (For more about Kelso\u2019s goals on the portal, see "Dire States," www.cio.com\/printlinks.)Guiding his actions, Kelso says, is restoring stability to the state budget, a factor that will affect strategic IT decisions for years and force departments to focus on their essential needs. "We need all departments to go back and ask themselves, \u2019Alright, given a 15, 20 or 30 percent reduction over a two- or three-year period, what do we really think are the core business operations that we should be performing?\u2019"Ironically, Kelso expects this kind of scrutiny to cause some departments to save money by increasing, rather than decreasing, their dependence on IT. A case in point is Kelso\u2019s plan to consolidate California\u2019s two data centers in Sacramento and Rancho Cordova. "We\u2019re not sure whether those data centers will actually have less business to do or more business to do," says Kelso. Departments may see the move to one consolidated data center as a way of automating manual processes, or of simply consolidating IT services\u2014e-mail or Web servers, for example\u2014that are now handled at the departmental level, he says. It also could be that the data centers remain in two locations but under a unified management team.Whatever the outcome of Kelso\u2019s IT projects, observers say conditions couldn\u2019t get much worse for a state which sells debt notes rated one notch above junk bonds. Any successes Kelso can show could help California bargain for lower debt payments, says Carol Kelly, a vice president of government strategies with Meta Group. That\u2019s, of course, assuming Kelso gets to keep his job.