CIO: Aldona ValicentiBudget Deficit: $500 million deficit on $14.2 billion budgetWhat That Means for IT: 2.6 percent cut for fiscal 2004, which comes on top of 5 percent cut on fiscal year 2002. The 2003 IT budget is $91 million.Priorities: Maintaining the state\u2019s IT infrastructure; a new HR system; microwave towers for public safety radio systems; security. Cuts: A server upgrade, an enterprise time reporting system, a new HR system, a disaster recovery plan, infrastructure security.Methodology: Keeping the must-fund list short by staying attuned to political winds. The Problem: By last December, Kentucky\u2019s fiscal crisis had grown so dire that Governor Paul Patton authorized the release of criminals from prisons before their sentences were complete. The reason? The state couldn\u2019t afford to house them. As if that wasn\u2019t bad enough, last January the head of Kentucky\u2019s Public Advocacy department told the Courier Journal of Louisville that if his office\u2019s budget is cut again, he\u2019s going to have to tell his lawyers to refuse poor people\u2019s cases\u2014never mind the fact that Kentucky is required by its own Constitution to provide criminal defense attorneys to all suspects who can\u2019t afford them. Against this dire backdrop, state CIO Aldona Valicenti struggles to obtain funding for her most urgent initiatives. The Process: Valicenti possesses an unblemished picture of what her priorities are: maintaining the state\u2019s IT infrastructure, public safety and information security. Notably, the soft-spoken past president of NASCIO says that the anemic economic climate and the war in Iraq elucidates her IT priorities. \u201cWith the actuality of war and the economic threat, prioritization becomes easier. You\u2019ve got less money and you know the one or two places where you have to spend it,\u201d says Valicenti.What becomes difficult is when her priorities compete for funding, and they often do in a budget situation as desperate as Kentucky\u2019s. The inevitable result of that competition is that many of Valicenti\u2019s priorities will be postponed until the economy rebounds. That\u2019s been the case for the past two years with the state\u2019s decrepit HR system. Valicenti says Kentucky has \u201cvery urgently\u201d needed a new HR system for several years. She says the existing system has been \u201cpatched and repatched,\u201d and only two programmers know how to run it. She\u2019s put this project before the legislature in previous years and now she has to present it again this year. And while the new HR system is a key infrastructure project, Valicenti believes that given the state\u2019s deep financial woes, she won\u2019t win funding for it from the governor and legislature this year, either. She has, however, been able to get funding for another one of her public safety priorities\u2014making sure the state\u2019s microwave towers, which provide the communications infrastructure for firefighters and other public safety personnel, are operational. In times like this, all Valicenti can do is make a compelling case for her recommendations and requests for funding. Then it\u2019s up to the governor and legislature to decide where the money will go. To keep her priorities clear, Valicenti depends on public sentiment and the governor\u2019s policy goals to guide her decision-making. \u201cWhat affects the health, welfare and safety of our citizens are the things I\u2019m looking to invest in first,\u201d she says.