Digital State 2002

The Center for Digital Government and the Progress & Freedom Foundation survey the 50 states to reveal who's getting the most out of technology in e-commerce and business regulation, digital democracy and management and administration.

by / August 8, 2002
This year's Digital State Survey found states grappling with budget shortfalls in an election year in which more than half the states could see new administrations as well as significant changes in other key offices. Although state officials expressed concern about these issues, most were optimistic about the budget's effects on technology and were confident of broad bipartisan support for technology programs. Several states said that, although IT systems can have considerable up-front costs, legislators do understand their long-term value. In Washington, which recently dealt with a $1 billion budget shortfall, the Department of Licensing's ambitious rollout of 10 new applications is on schedule.

"We are not only going to be able to go forward with them, we are being encouraged to do more." said Fred Stephens, director of the Department of Licensing. Each application transfers data entry work to the customer.

"What our constituents and legislators are finding out, is these are cost-saving opportunities," Stephens said.

Gerry McDougall, deputy director of the Department of Licensing, admitted the first few applications were expensive. "But we built an infrastructure that allows us to do the remainder of these things with very little upgrade or additions," he said.

And, as in the past, budget shortfalls have stimulated innovation and helped encourage enterprise thinking. Planning is tighter, management more cost-conscious, and information systems are part of the solution. And as budget trimming continues, service keeps improving.

"Taxpayers can do business with us any time of the day or night, any day of the week, with a computer and a credit card," said Stephens.

E-Commerce and Business Regulation
"Electronic commerce/business regulation is the most citizen-facing category in the Digital State Survey," said Cathilea Robinett, executive director of the Center for Digital Government, the knowledge-management and research division of e.Republic. "It represents true online government and this year's survey reflects great strides in payment options and transactional 'beyond-PDF' government. Both Virginia and Washington have been working extremely hard in this area."

Kent Lassman, director of the Digital Policy Network and a research fellow of The Progress & Freedom Foundation, noted the rapidity of change in this particular arena.

"With nearly half of the top-10 states improving their ranks from last year, double-digit climbs up the rankings by three states and five newcomers to the top-10 rankings, this category shows how an initial adoption of technology is not enough to stay ahead. States are continually improving and, as a result, the front of the pack is a volatile place to be."

The Virginia Department of Motor Vehicles has 19 online transactions, including online driver's license renewal, which it first offered in December 1999. It offers information wirelessly to PDAs and plans to offer transactions wirelessly as well. Offline, the department offers a speech-recognition application.

"It gives customers the ability to call in and speak their way through the insurance verification transaction," said Lana Shelley of the DMV. The new application uses the back-end XML interface of an existing Web-based insurance verification application.

The Department of Taxation developed a time-saving online business registration application. The business registration process took two or three weeks to complete on paper, but now can be completed online in 20 minutes, according to Robert Schultze, executive commissioner of the Department of Taxation. In addition, applications are integrated with the Employment Commission so information need only be entered once for use by both agencies.

Jean Tingler, director of information technology for the Virginia Economic Development Partnership, said being first to market means out-competing other states and even countries for economic development opportunities. Virginia Scan is helping the state do just that.

"We have up-to-date information on all the potential industrial sites and buildings," Tingler explained. Data includes satellite imagery and digital aerial photography. In addition, local governments can log on and update their own information. That makes the state's information more accurate, and in return, the localities don't need to build their own application, saving them money.

Virginia's statewide e-procurement application, eVA, is one of the most comprehensive in the country, said David Nims of the Virginia Department of Technology Planning. In the first few months it was up, the program carried $80 million in sales, representing 16,000 individual orders. By early fall, eVA will link to agency ERP systems with a message broker, so agencies won't have to go back and forth between their ERP systems and eVA to complete transactions.

In August 1998, Washington business customers filed taxes online for the first time. "The goal is to get the majority of businesses to use electronic filing," said Ralph Osgood, assistant director of taxpayer account administration for the Washington Department of Revenue. "That's where we'll get the economy of scale."

Osgood is also mayor of Tumwater, so he understands the frustrations of local business when dealing with state sales taxes. Washington levies sales tax at the location of the sale, so a company installing a heating system, for example, needs to charge tax based on that location. A new GIS application allows businesses to put the customer's address into the application and receive the tax rate and local four-digit code or identifier number.

"This application will allow them to determine the exact location of that site, charge the appropriate tax and remit it to the appropriate taxing entity," said Osgood.

Washington's Department of Labor and Industries is about to launch an application called Quickcards for contractor registration and license renewal. Later phases will open the system up to all tradespersons. The agency already allows customers to purchase electrical permits, schedule inspections and file affidavits online. And in January, the department will submit a funding package to the Legislature to put Workers Compensation insurance processing online. Dave Pratt, e-commerce business manager of Labor and Industries, said the first piece would allow the exchange of imaged documents with employers and third-party providers. The department plans later to allow secure access to Workers Compensation files by doctors, employers and attorneys.

Digital Democracy
"The Digital Democracy category shows a maturity that reflects combined effects of a steep learning curve on how to utilize technology, as well as the forceful wake-up call from the 2000 election cycle about the importance of accurate, timely and readily available information for citizens and policy-makers alike," said The Progress & Freedom Foundation's Lassman.

Robinett agreed, saying, "More states have some form of electronic voting than we thought. Even though chad jokes are still flying, states have made deliberate strides in the electronic voting arena."

In addition to voting, legislatures have responded to the call to become more digital. "Legislatures have made huge strides in making state democracy accessible to citizens," Robinett said. "The advancements on legislative Web sites have increased exponentially."

In March 2000, Arizona voters cast nearly 72,000 votes over the Internet in the state's Democratic party primary. Although Internet voting has yet to catch on, punch-card ballot problems in the 2000 presidential election drove the search for more reliable systems. It is perhaps appropriate, therefore, that Arizona came in first in the digital democracy category. But digital democracy is much more than replacing chads with electrons, as demonstrated in Arizona.

In most states, citizens who wish to testify before a legislative committee must be at the hearing, fill out paper slips and get them to a committee chairperson, who spreads the papers on the dais and starts calling names. The process is different in Arizona. "There are four kiosks around the committee rooms," said Steve West, information systems manager for Arizona's Legislative Computer Services.

People who want to testify create a user ID, then select the appropriate committee, bill and position -- for, against or neutral. They can also indicate if they will testify for sure or only if necessary. Once registered, they can sign up to testify from their home or office.

"The committee chairs have laptops at the dais," explained West. "They see this stuff start queuing up by bill. They can sort by bill, by who wants to speak, by 'for' and 'against,' then they click off as the bill is heard, and if somebody comes up to testify for a bill that's already been heard, it won't let them."

Closed circuit television carries details on hearings, bills and results. Afterward, the application draws up a complete report of each hearing, complete with who testified, and puts it into public record. West credits Senate President Randall Gnant for driving the application.

Michael Totherow, CIO of the Arizona Secretary of State's Office, is involved in a project he calls "e-motor voter," which would combine an existing law for digital signatures with motor voter, so people could register to vote on the Web instead of at the DMV. Remote voting is "high on the radar screen," said Totherow, and he's keeping an eye on a Department of Justice smart card project as a possible avenue for security. "There really is not a standard right now for Internet voting. We want to participate in creating standards that keeps the security of the process without compromising anonymous voting."

Management and Administration
If government is to make a successful transformation from the Industrial Age to the Information Age, this year's top-ranked states in management and administration are the bellwethers.

"This category really embraces key digital-government policy areas that must be addressed for true 21st-century government to flourish," said Robinett. "This category reflects the results of a lasting commitment to the tenets of digital government."

Arizona Gov. Jane Dee Hull will term-limit out this year, and perhaps no test of management and administration is tougher than guiding major long-term projects through a change of administration. Susan Patrick, strategic communications manager of Arizona's Government Information Technology Agency (GITA), said things are looking good for IT, with all the major candidates either already statewide officeholders with a record of support for IT, or coming in with an IT agenda.

Another contribution to project stability is that IT projects in Arizona are evaluated on specific criteria before they are approved. "It's designed to be [politically] neutral, to provide a benefit to the citizen, and every project with costs over $25,000 -- a very low threshold -- must go through this criteria," said Patrick.

She said the Information Technology Authorization Committee also has a federal and local representative. "So we're tying into local and federal initiatives, as well as getting feedback from private experts," she said, adding this careful scrutiny helps "reduce the possibility that a project is going to come off the tracks for non-technology related issues."

As for technology issues, every state agency is required to submit one-year and three-year technology plans. "That whole process is automated, and we only collect the information we will use," said Patrick. "And we collect an automated inventory, so we can pull up how many servers, printers, etc., we have."

The state also has a set of policies, standards and procedures and a project investment justification. "With all that information, you compare that with the agency one- and three-year plans that are tied back into the overall management and performance plan from our Office of Budget," said Patrick. "And so the state, agency and technology plans are all aligned. As each project comes up, those are compared to the strategic plans, so it all moves in the same strategic direction."

"Our continued success in the IT arena in the state of Indiana is a very, very, strong and unwavering commitment to some really core values," said Indiana CIO Laura Larimer. "One of those is that we are instrumental and strategic to the delivery of citizen service. The second is that we absolutely must continually improve. And the third is that we are absolutely committed to an inclusive process."

As part of the inclusive process, the state tries to identify applications in use in one agency that might help in another. "We have identified applications in a single state agency [that] has enterprise-wide applicability," said Steve DeMougin, deputy director of Indiana's Department of Information Technology.

Indiana outsources its portal to Indiana Interactive. Candy Irven said her company reports to an oversight board, the Enhanced Data Access Review Committee (EDARC) that is made up of individuals from government, the private sector and the general public.

AccessIndiana provides development at no charge to state agencies. "It's allowed us to put up 180,000 pages and over 175 interactive applications," Irven said. "The way we are able to recoup our investment and make a profit is by the few services that carry an enhanced fee."

Larimer said that from 1996 through 2002, portal use shot up each January, due to the start of the legislative session. "At first we thought it would drop off after the legislative session was over but it never did," she said. "So, we thought it wouldn't happen again next year, but it did and again didn't drop off, so we began to recognize at once that this was a huge reason why people came to participate in digital democracy. They came to understand what was going on with the governing process and then they found other things on the Web site that made it interesting for the rest of the year. It's something to come back to. This drives an overall business concept behind the importance of the portal," she said. "We are better and more successful together than we are separately. By having the single portal approach we have really capitalized on that from the very beginning."

"Washington is not a centralized, governor-centric governance model," said Tom Parma, senior technology management consultant of the Washington Department of Information Services (DIS). Officials from the governor's office, cabinet, and deputy directors and legislators regularly convene on IT topics. "So, it's well represented in breadth and vertically within the organizations," Parma said.

Last legislative session, the state had to fill a $1 billion hole in the budget, and next biennium, they are looking at a $1 billion to $1.5 billion deficit.

"It is a reality that IT is a tool for difficult times," said Parma.

Last year, the Legislature dealt with IT funding proposals on a case-by-case basis. The Budget Office and DIS reviewed the projects, identifying those that offered the best return on investment and also followed the state model. The Legislature could then pick from those recommendations which items to move forward. "The pools were really geared to what projects really made sense from a digital government standpoint," said Parma.

He attributes some of Washington's success to the Digital Government Academy, which he describes as a vehicle to bring together agencies with common interests, to identify requirements for sharing applications. Some of the original licensing applications developed in the academy have been shared among agencies and even internationally.

The Center for Digital Government and The Progress & Freedom Foundation wish to thank the states for their participation, and hope that this ongoing effort will assist in the replication of best practices and good ideas in the cause of effective, transparent and citizen-centric government. AMS and Microsoft sponsored Part II of the Digital State Survey.
Wayne Hanson Senior Executive Editor, Center For Digital Government