They're the Internet start-ups few people talk about: government portals--Web sites with little glamour, but ones that will likely transform the way citizens interact with local, state and federal agencies.
Over the last few years, state employees and Internet application firms have redesigned the online faces of many states, transforming dot-govs that were once bureaucratic mazes into dynamic Web portals resembling Yahoo! and Excite. The electronic makeover allows citizens and businesses to more easily access services and information. It's the new friendlier face of government.
This month, North Carolina's new NC@YourService made its debut. It joins the ranks of at least 20 other state Web sites organized as portals, with eight more expected this year. One of the most state-of-the-art in concept, the North Carolina site was designed in conjunction with Yahoo! With just a few key strokes, citizens can personalize the site as a "mygov," accessing health and employment benefits, the weather and local school closings, any time of day or night.
"Too often in government we organize the web like a phone book, but citizens don't think like that," said Rick Webb, North Carolina's Chief Information Officer. The new portal is organized by service rather than by government structure, he said.
Although North Carolina's approach is new, the move of government to the Internet is not. State governments have been leaping into cyberspace for nearly a decade. Like banks, which report cost savings of up to 90 percent with online banking, states may reap significant economic benefits. IBM's Institute for Electronic Government estimates that they can cut some costs by up to 70 percent by moving services online.
In Pennsylvania, the Department of Revenue saved $2 million last year through online tax filing, while the processing time plummeted from 38 days to 18. In Alaska, registering a vehicle used to cost the state $7.75 to process; now it costs 91 cents.
Despite the cost-cutting potential, citizens so far have not seen any of these savings. Sometimes they even have to pay more. Many state portals charge citizens a transaction fee for certain services, making them pay a nominal amount for the convenience of not having to wait in line at a government agency where the service is free. In Indiana, for example, citizens are charged 50 cents for renewing a license plate or registering a vehicle.
"We get the occasional customer who asks: Why are you charging me a tax?' We point out that 99 percent of the information is free, but if they don't want to pay for the one percent, they can still walk into a branch of the DMV," said Robert Knapp, the director of marketing at Access Indiana. (End Corrected Information).
Texas uses the same method to pay back its private-sector partner, KPMG Consulting, as does Wyoming to repay Andersen Consulting.
Some states are looking for a different way to offset development costs. At least three -- Rhode Island, Massachusetts and Michigan -- are pondering selling ad space on their sites. The incentive is strong: advertising on the Web is expected to grow from $4.3 billion last year to $28 billion by 2005, according to a report by Jupiter Communications.
Not everybody is gung-ho about advertising. Some people fear that having ads on state Web sites could lead to conflicts of interest, especially when states award contracts to businesses.
In order to avoid the potential pitfalls of advertising and transaction fees, Pennsylvania and North Carolina are taking a third route: forging a no-cost partnership with a private technology company.
"We feel that with on-line services driving the cost of government down, citizens shouldn't have to pay a premium for government services," said George White, who manages Pennsylvania's Power Port, to be launched this fall..
The power behind Pennsylvania's port is Microsoft. The company "has dedicated $100,000 worth of consulting services as a gratuitous service to the commonwealth," White said.
While he and other Pennsylvania officials are grateful for the donation, the deal has its skeptics. They say the partnership represents a potentially lucrative arrangement for Microsoft. Several links on the portal site direct visitors to Microsoft services such as an email account with msn.com.
It is the bigger picture that worries Wayne Kessler, a fellow of The Commonwealth Foundation, a non-partisan public policy think tank based in Pennsylvania, and owner of a web development company. He believes the partnership could offer Microsoft an unfair advantage when competing for state contracts.
"The state is positioning itself to market Microsoft to local government," said Kessler. "That's over 25,000 entitiesthat's a decent plum."