Arizona leads the nation in applying advanced technology to government operations. That's the conclusion of the 2002 Digital State survey, a year-long study of electronic government progress conducted annually by Government Technology magazine, the Center for Digital Government and the Progress & Freedom Foundation.

Arizona, the fifth-place finisher in 2001, topped this year's contest by posting strong scores across each of Digital State's eight survey categories. The state earned perfect 100-point scores for its use of technology in social services, GIS and transportation, and education. It also ranked highly in other categories measuring progress in law enforcement and the courts, e-commerce and business regulation, taxation and revenue, digital democracy, and management and administration.

The state pioneered e-government transactions with initiatives such as Service Arizona, and it now renews more than 20 percent of vehicle licenses statewide via the Internet. Arizona recently unveiled an application allowing citizens to register to vote online as well.

The state's top-ranked finish stems from a long-term commitment to electronic service delivery, according Cathilea Robinett, executive director of the Center for Digital Government.

"Since 1992, Arizona has been building the governance structure, the technical infrastructure and enterprise view to support electronic government," said Robinett. "It's a gradual process, and they've worked steadily to put all the right pieces in place. Now, Arizona has essentially institutionalized e-government."

Michigan, powered by a reorganization that put all of the state's IT resources under one roof, jumped from No. 9 in 2001 to the No. 2 position in this year's survey. Like Arizona, Michigan earned a perfect score for automating social-service functions; it also managed impressive performances in the survey's digital democracy and taxation and revenue categories.

Gov. John Engler, who personally drove much of Michigan's e-government progress, said he is pleased with his state's performance.

"When we began the Web portal, we set out to be the best by offering people the best in online services," said Engler. "The site has garnered over one dozen awards, and I'm proud that this latest honor cites the state of Michigan's technology excellence."

Washington, a perennial government IT powerhouse, held onto Digital State's No. 3 ranking for the second straight year, while last year's winner, Illinois, dropped to fourth place in 2002.

Fifth-ranked Wisconsin was one of several jurisdictions posting dramatic improvement this year, jumping from 14th place in 2001. In addition, Virginia went from 28th in 2001 to sixth this year. Indiana vaulted from 22nd to eighth, and Connecticut rose from 24th to 10th.

The survey also revealed some jurisdictions sliding in the opposite direction. Maryland dropped from No. 4 in 2001 to a 10th-place tie in 2002, and New Jersey toppled from seventh to 16th. California, wracked by a high-profile contracting scandal that claimed the state's CIO and director of e-government, fell from the top 25 altogether this year after posting a respectable 23rd-place finish in 2001.

Arizona Gets Creative

Arizona CIO Craig Stender said his state's first-place finish came against a backdrop of changing IT priorities triggered by the 9-11 disaster and a "tremendous" budget problem.

"We rely heavily on sales tax revenue, so our [budget] swings may be more wild than some other states. And we're on the wrong side of the swing right now," he said. "We've had to be creative. We've had a good vision for e-government, and we needed to exercise all the different types of funding to keep the progress going."

For example, the state recently used bonds to fund a massive initiative to automate and e-enable its human resources processes, Stender said. It also used performance-based contracting - called "gain sharing" in Arizona - and convenience fees to fund IT projects in other areas.

Although funding shortages complicated the task of implementing new IT systems in Arizona, they also prompted the state to