Digital State Part III

Many winners illustrate progress in taxation and revenue, GIS and transportation, and education categories.

by / October 31, 2002
Part three of the Digital State survey judged states on their performance in three areas: taxation and revenue, GIS and transportation, and education. This year's survey was conducted against a backdrop of budget shortfalls and a subsequent rethinking of priorities and plans. Moreover, most states were facing the possibility - and in several cases the certainty - of new administrations next year. Although all of these factors can hinder long-range planning, the outlook for IT remained surprisingly good based on technology's potential for reducing costs.

Here is a look at the winners in each of the three survey categories:

Tax and Revenue Category

In the complex world of finance and taxation, Idaho came up with what the Federation of Tax Administrators (FTA) called a "cool idea." The Sept. 9 issue of the FTA TaxExpress, said "Idaho just barely beat New York to the finish line to become the first state to offer truckers a way to file their International Fuel Tax Agreement (IFTA) tax returns and payments for free through the Internet."

The IFTA includes the 48 contiguous United States and 10 Canadian provinces; it's so complicated to figure, there is a 90-percent error rate on paper-based systems. Interstate truckers based in Idaho can now do all their fuel tax report and complete their fuel tax online. IFTA allows truckers to file only with their base states, which then share mileage information and tax revenues with each state or province the truckers cross.

"We are obviously proud of the advances made here at the Idaho Tax Commission in using Web-enabled technologies to reduce the burden of tax compliance for our taxpayers, especially in the business sector," said Jake Hoffman, chief deputy for IT policy.

Anyone who knows Laura Larimer, CIO of Indiana, knows she's an enthusiastic advocate of the self-funded portal model used by her state. "We're able to accomplish so much with a small amount of funding," she said. "The other thing about the self-funded model is that it is not subject to the ebbs and flows of the budget process. So because we are funded on user fees, we can continue to do our work, even at a time when every state is having budget problems." Larimer also is enthusiastic about Ken Miller, commissioner of the Department of Revenue. Miller, she said, saw how Revenue could leverage IT, and wanted to be first in the nation to do tax filing online.

Miller described a long list of cost-saving IT projects. "Indiana has a 2-D bar code on the income tax return," he said. "And we expanded that to the corporate return. We just did the numbers, and we saved $1.6 million this last tax season on the individual income tax returns.

"We allow filing for prior years," he continued, "and had 10,000 people file for prior years, on our Internet I-File program through AccessIndiana," he continued. A bar-code system for locating and indexing returned refund checks, which he said the staff developed in three days, allowed him to reassign four people to higher-priority tasks. "What I look at," Miller said, "is creating a culture or environment so people will take a look and say, 'well, why don't we do this ?'"

Naomi Foret, IT management consultant for Louisiana, said the state is moving forward on e-commerce and electronic payments. "[Online] payments for individual income tax will be done this coming year. We've done it for our business taxes, and we're going to expand our business taxes within the next couple of months." Foret said the state is upgrading its legacy systems now. "We do have a lot of people working on that, and on maintaining our legacy systems. So resources are always short."

Lars Rydell, who works in the office of the Finance Commissioner, said Maine has moved ahead with IT innovation where it makes sense - where it provides a cost-effective way of doing business or a better way of doing state business.

"People can file over the phone, they can file online, they can send in paper," he said. "If they send in paper on the income tax, there's an imaging and OCR [optical character recognition] system that reads all the information into the system. Over a long period of time, we've been developing this Maine automated tax system, which now includes all the taxes - large and small. All tax information is put into the unified automatic tax system."

Karin Peterson, director of systems and programming for Maine Revenue Services, said that although Maine is facing the same revenue situation as other states and is being a bit more conservative, there are plans to expand electronic services in some areas.

"We're looking forward to expanding the number of people who use the I-File and the E-File and the telefile," she said. "We're also expanding our data warehouse, which will allow better and easier access to tax information. We're loading information into it now, but we're looking at expanding the amount and types of data we put in and also the relationships of the data so we can have easier queries and get information easier."

By being resourceful with staff and trimming use of external consultants, Missouri has maintained momentum in e-government. "Missouri budget matters have affected the state's IT projects," said CIO Gerry Wethington, who credits the state's IT advisory board - made up of CIOs from all the various state departments - for much of the progress. "We're having great success in terms of moving toward enterprise architecture, declaration of standards, development of policy, and Web page common look and feel."

The state already has done the "big bang" projects, said Kay Dinolfo, director of e-commerce for the Missouri Department of Revenue, citing online income tax filing and motor vehicle registration initiatives. Now the department is working on legacy system improvements that don't directly affect the customer. "They do indirectly," she said. "Because the better we are at storing and retrieving records, the better service we can deliver on the front lines."

Jim Weber, CIO of the Department of Revenue, said the state allows tax filers to check the status of refunds online. "One of our larger challenges is to integrate all of our file systems so we can look at an integrated tax system," he said. "We think that within five years or so we'll have that integrated. We have 30 different tax systems, so our goal is to integrate those."

Wethington views the current economic downturn as an IT opportunity. "With all the budget cuts, what people are looking at is not how do you cut your way out of difficult economic times," he said. "It's got to be how do you innovate your way out of difficult economic times."

Nebraska used technology to cut its seasonal tax-processing work force in half. "Our first budget cut amounted to around $600,000," said Mary Jane Egr, state tax commissioner. "The budget for our core tax programs is around $20 million, so in the scheme of things it wasn't horrible. But oddly enough, that amount was exactly what we had budgeted for seasonal workers for the upcoming processing season, so we focused in on that."

To take up the slack, the agency did some "tweaking" of its processing system, publicized that electronic filers would receive tax refunds in seven to10 business days, and solicited volunteers from other areas of the department to fill in. Egr and others volunteered half days, opening mail and batching returns. The increase in electronic filing enabled a smaller number of people to get paper returns processed in an average of three weeks, which beat the previous year's average.

Richard A. Gettemy, administrator of the state Department of Revenue's Finance and Management Services, said the department has been automating processes for some time, beginning with electronic funds transfer, electronic filing and telefile. "We require anyone with a liability of over $100,000 to pay electronically," he said.

New Jersey
The New Jersey Division of Taxation has accepted credit card payments over the Internet for approximately three years and e-check payments for two years. Together, credit card and e-check payments represent millions of dollars in state tax payments annually;they were also very popular during New Jersey's recent tax amnesty program. And have facilitated the electronic filing of tax returns by both individuals and businesses.

The taxation division has used imaging technology for processing and storing tax returns for more than 10 years, and it now has more than 1 billion images available electronically.

In the Ohio Business Gateway, small businesses can remit taxes and perform other government transactions in a single location. Government agencies get the data in electronic format, which makes things easier for them. More features have been added, and in January 2003 licensing will be rolled out as well.

Ohio's Tax Commissioner Thomas M. Zaino said the benefits of electronic tax filing are so great, he wants to give taxpayers 10 extra days if they file electronically. "We really don't lose any revenue," he said. "We get 3.5 million checks dumped on us April 15 through 17. We don't get them all open within the first two weeks, and it takes us six weeks to get them all processed. So we don't lose any float."

"County Connect," a proposed single point of access for state and county taxpayers, would reduce state and county costs with electronic information sharing. The key to building systems under the current financial situation, Zaino said, is to look first at fast return on investment (ROI). "We'd like to integrate our customer touchpoints, like with CRM [customer relationship management], but the ROI on that is a much longer return, so it might be delayed. But it's something that I'm certain will happen."

While some state agency budgets have been cut as much as 15 percent, Zaino said Web filing and expansion of a sales tax telefile system allowed the state to delay the arrival of seasonal employees by two weeks this year, at a considerable savings.

Next year, a pilot will run in Franklin County to get 100 percent of sales taxes filed electronically, Zaino said, adding that the federal government also has looked at the idea; he thinks it could work very well for other types of taxes as well.

South Dakota
South Dakota has no personal income tax, said state CIO Otto Doll, but it handles sales taxes electronically through an arrangement with GovConnect. In addition, the state deals with many small businesses. "We automatically sweep people's bank accounts to create a debit relative to their tax payment requirement," he said. To do that requires automated systems and good coordination. "So the [business] process here in South Dakota drives an automated process."

GIS and Transportation Category

Gene Trobia, Arizona state cartographer, worked for Pima County before coming to the state, and he is now president-elect of the National States Geographic Information Council. "The county experience is probably a big reason the state hired me," said Trobia. "We're really moving toward e-government, spatially enabling our portal technology. We're improving the Arizona state Web site to provide spatial services to the public, to personalize the service to the citizens. We're going to integrate a lot of agency databases and provide access to data stores over the Net."

The Arizona Geographic Information Council (AGIC) is active and expanding, said Trobia. It includes federal, state, local and private-sector representatives, and just grew to 33 members. "They created a homeland security committee, and we're looking at implementing multiple nodes between public safety, emergency response, transportation and state land department doing two levels of things. The first is to create the baseline framework data and infrastructure to have an enterprise GIS so we can have that in place to address state public safety and health and welfare issues which would lead toward critical infrastructure security and homeland defense."

The Illinois Department of Transportation has been innovative in using GIS, said State CIO Mary Barber Reynolds. The agency is incorporating GIS into winter weather alerts, tourism applications and other initiatives.

Reynolds said the transportation agency is beginning to use crash analysis and traffic counts as an aid for distributing resources based on critical needs. The information is used internally and externally.

The state also is creating a suite of electronic services for truckers.

"It's part of the CVISN [Commercial Vehicle Information Systems and Networks] piece. We'll integrate it online and save them enormous amounts of time and energy," she said. "A unique set of state agencies is working together to assist the industry. Illinois is one of the largest trucking states in the country."

Kansas recently used GIS to present a $3.8 billion highway program to state lawmakers. Data, priorities and other factors were fed into the GIS system, said Kansas Chief Information Technology Architect Rick Miller. "The timeliness and the visual sense ... helped facilitate that process," he said. "You could sit there and look at spreadsheets till heck freezes over, and still not get a clear sense of the overall picture. That's the beauty of GIS."

Kelly Badenoch, assistant bureau chief of computer services, said GIS technology will be part of Kansas' 511 travel information system currently under development with North Dakota-based Meridian. "We're just getting started," she said. "It will bring information from road sensors, the National Weather Service, KanRoad [a road construction and detour reporting system] and from our maintenance people, and it will allow forecasts as you drive down the road. Now we have a 1-800 number that people can call and get roadway information, but I think the 511 system will replace that."

Kansas has had its GIS data clearinghouse on the Internet since 1994, and has a number of regional GIS activities under way as part of the state's participation in the MidAmerica GIS Consortium.

Education Category

"Arizona uses an ASP model for school technology," said Craig Stender, Arizona CIO. Partners in the Cox Education Network are Cox Business Services, LearningStation, Ensynch, ASSET and BearingPoint. This is statewide, every K-12 school, including 250 software titles. "The implementation is about halfway done," said Stender. Students have 10MB of storage space where they keep copies of their work. The cost is around $8 per student.

"The Illinois Century Network has been a huge project to provide access to K-12 and higher education, but also for libraries, museums, state and local government, and hospitals," said state CIO Mary Barber Reynolds, adding that the network has encouraged cooperation among public organizations.

"For example, we're finding collaborations between a hospital and a K-12 school - the school can't afford to hire a nurse, so they use the hospital as a resource," she said.

Besides serving as Illinois' CIO, Reynolds is a local school board member and the mother of three children, so she has a strong interest in education and technology.

"In the mid-1980s, Illinois passed a school report card law. Teachers had to produce the report card, and make it available publicly, so the summaries are available in the local newspapers," she said. "Now, 20 years later, we're able to integrate that data on our state homepage. If you were thinking about moving to Illinois, we now incorporate through GIS [a service that] enables you to get the census data of the community you're moving to and the report card data."

If you want to know how Indiana schools are doing, log on to the Accountability System for Academic Progress (ASAP) , said Mike Huffman, special assistant for technology in the Department of Education. The newly created site is a storehouse for school data, academic standards and other information.

The state also offers a suite of innovative online services, developed by the Indiana WebAcademy.

For example, E-parent allows parents with user names and passwords to access lesson plans, attendance records and student grades. The application connects with school information systems, pulls data from those systems and sends it to a centralized server, making the material accessible to parents.

"It allows communication between parent and teacher," said WebAcademy Director Ken Scales. "When a parent logs on, they have the ability to communicate with teachers."

"E-store allows e-commerce for schools. They can sell bookstore items online. We have a couple of schools doing this. PTAs can do their fund raising online with this as well," he added.

The new EZ Website is a tool that allows a teacher or student to create a Web site in 10 minutes. "Type, hit one button and you have your Web site," said Scales. "Teachers love it, [it's] just so easy. We wrote the application ourselves, and SQL server is the database behind it."

South Dakota
"Years ago we wired classrooms," said South Dakota CIO Otto Doll. "We have 100 percent of our teaching corps, 100 percent of our administrator corps online simultaneously, and we have upwards of 70 percent of our students online. They are on a network that directly ties them to each other, to state government, to K-12 and to universities.

"The state is also the ISP," he continued. "So we give them access to the Internet; we have a videoconferencing network with sites at every university, every junior high school and high school."

About half the state's teachers have completed a 200-hour course on using technology in the classroom, and all school administrators have finished a two-week course in technology, said Doll.

The 20-year-old Utah Education Network enabled much of the technology innovation in the state, according to Dr. Gary Wixom, assistant commissioner of the Utah State Board of Regents.

"The infrastructure for technology is pretty good," he said. "It supports all of our Internet infrastructure."

While Wixom said tight budgets are affecting many innovative programs, eight institutions are upgrading their student and management information systems. He added that the state plans to continue extending online courses to cope with a rapidly growing student population.

"We have about 20,000 enrollment across the state, so where we can deliver online or with a combination of in class and online, that all helps," he said. "It's very difficult to move forward with technology if you don't have budgetary support. But on the other hand, in a time of budget constraints, where we have growth, technology is the answer as well."

Wayne Hanson is senior executive editor of the Center for Digital Government, and editor of Government Technology International
Wayne Hanson Senior Executive Editor, Center For Digital Government