Stateline Story

Some States Charge for E-Government Information

  • October 01, 2002
  • By Erin Madigan

State agencies across the nation are trying to make electronic government more efficient and easier to use.

But at a time when state budget deficits are increasing as quickly as Internet speeds, funding these online ventures is becoming problematic. As a result, the search for alternative e-government funding has led some states away from the tax rolls and towards user fees.

However, critics say charging fees denies some individual users or organizations needed and readily accessible state services. But state officials counter that without setting fees states simply couldn't afford to offer online services. In addition, officials say, a very small percentage of services require fees.

The convenience of e-government is in demand by government officials and taxpayers alike. By eliminating manpower and paperwork, online services could eventually be less expensive than traditional government. But convenience comes at a cost. For now, states are running parallel governments in person and online and must balance the cost of running them both.

Darrell West, director of the Center for Public Policy at Brown University and author of a new study on state and federal e-government, is concerned subscriber fees could stop poor residents or those who live in rural areas from gaining access to certain services on state Web sites.

But e-government is expensive and states are scrounging for every penny they can get. For example, Laura Larimer, chief information officer for the state of Indiana, concedes that charging fees isn't ideal. But she says the state needs to charge in order to provide access.

"If I could print money I wouldn't charge anything for any of this, but I can't," Larimer said.

Effective e-government carries heavy up-front costs -- between $500,000 and several million dollars. States must pay for computer programmers, research to expand services and new software and Internet technology equipment, according to West.

For example, In Indiana, annual operation costs neared $3 million, according to Larimer. It cost $5.5 million to operate California's Web portal this fiscal year, an amount significantly reduced from last year in light of a tight budget.

Indiana's web portal, accessIndiana , operates through a fee-based model. Citizens who use the services pay fees to cover the cost.

For example, residents requesting uniform commercial code filings or driving records must pay an annual subscriber fee of $50 for an individual and $75 for an organization to access the information. This subscriber fee is in addition to nominal online "convenience fees" and statutory fees, which may be attached to each transaction.

There are free services, too. In Indiana, citizens can file income taxes online, find out if a doctor is licensed or check the latest lottery numbers simply by logging onto the Web site. Larimer emphasizes that only a small number of online services carry a fee. Of the 175 services available on accessIndiana, only 25 are fee-based, she said.

California, which currently does not charge user fees, may be next to start charging. The state currently uses tax dollars to fund its official Web site , but may introduce a fee-based model within the next few months, according to Kevin Terpstra, a spokesman for the state's Internet technology department.

"Because of the way budgeting is done in California and because we're in a belt-tightening mode, we are seriously considering moving toward a fee-based model, a self-funded model," Terpstra said.

Brown University's West suspects the trend will continue. His study found that two percent of state and federal Web sites require user fees to access certain information; only one percent requires premium fees, like subscriber fees. Though the number is small, West said charging money to access government information online is becoming less of an anomaly.