© December, 2000
Carole Keeton Rylander
Texas Comptroller of Public Accounts
Report of the e-Texas Commission

e-Texas Chapter 2 | Endnotes

At Your Service:
“Customer-Facing” Government

Texas’ government is large and can be enormously complicated. Our state government includes hundreds of state agencies, some created simply to oversee, assist, manage, or keep track of other state agencies. The sheer size and complexity of this interlocking network of agencies and programs make it difficult to comprehend. The same government that supplies financial aid to single mothers also tracks down criminals, monitors emissions at chemical plants, and regulates the plumbing profession. The state serves a multitude of purposes, is affected by many different interests, and interacts with a staggering array of taxpayers, customers, and clients.

Dealing with the state can be bewildering. Finding out which department has a specific responsibility—permitting, collecting of a specific tax, or performing a particular service—can be extraordinarily difficult.

Say you want to open a dry cleaning shop. You’ll have to contact at least five state agencies—the Department of Licensing and Regulation, the Texas Natural Resource Conservation Commission, the Comptroller of Public Accounts, the Texas Workforce Commission and the Texas Department of Transportation—to obtain the authorizations you need to do business in Texas. In addition, you’ll also have to contact the federal Environmental Protection Agency, Department of Labor, and Department of Transportation to ensure that you comply with applicable federal laws (see Figure 2-1).

Previous Texas Performance Review (TPR) reports pointed out numerous overlaps such as these. In 1996, TPR’s Disturbing the Peace examined the state’s regulation of grocery stores and found that “food retailers are subject to as many as nine state regulatory agencies, 17 different types of state licenses, and various statewide inspection processes, both scheduled and unannounced.”[1] The agencies involved range from the Department of Health and the Comptroller’s office to the Lottery Commission and the Parks and Wildlife Department.

Phone banks and Internet sites represent a start toward better customer service, but the average person still has to make a lot of calls or visit a number of government Web pages to find the information they need. Too often, even when they do find what they need, Texans still must fill out a paper form or visit a government office to take care of their business. It doesn’t have to be this way.

The Customer Revolution

The private sector can teach Texas government a lot about customer service. To succeed and stay successful, companies have learned to focus on their customers’ needs and preferences.[2] And that focus calls for them to do things the way their customers want: providing goods and services efficiently, at the lowest possible cost, in the shortest amount of time. If they make things difficult for the customer—too complicated, too long, too expensive—the customer will go somewhere else. Thus, the notion of “putting customers first” has become commonplace in today’s society.

One important feature of most successful companies—emphasized by the growth of Internet e-commerce sites—is that they present a single “face” to their customers. When you want to buy a product or a service, the company doesn’t force you to first figure out what department or division to go to for help. As far as the customer is concerned, there is just one company, one “front desk” to deal with; its internal divisions are invisible to the customer. This has been coined the “customer-facing” approach. And it’s revolutionizing customer service throughout the corporate world.

Successful companies strive to make sure that their customers can complete transactions satisfactorily during their initial contact with the firm. Strategies that provide easy access through seamless service and “one-stop shopping” help companies meet customer needs with a minimum of hassle. Technology also can help customers serve themselves quickly and efficiently, through automated communication systems as well as the Internet.

Despite some improvements in recent years, state government is still a confusing maze to most Texans. People don’t care what government agency or office handles specific questions. And they shouldn’t have to. Citizens should be able to get what they need from government with the click of a mouse or by sending an e-mail. Texans should be able to access a variety of information and services from a single location, regardless of what agency is responsible for it.

Moreover, whether they’re buying tags for their cars, checking school test scores, applying for a business permit, or making reservations at a state campground, Texas taxpayers should be able to take care of their business on their own time, from the convenience of their own homes. They shouldn’t have to search for a parking place to visit a government office that closes at 5:00, stand in line, fill out multiple paper forms, or be shuffled from one person or agency to another in search of an answer.

To provide Texans with high-quality customer service, state government must be able to serve its customers without regard to agency turf wars or organizational schemes.

Federal Customer Service Standards
A 1993 Executive Order issued by President Bill Clinton required federal agencies to set standards for customer service and to survey their customers regarding their satisfaction with it. This was the beginning of an effort that has spurred all federal agencies to display a new interest in their customers’ needs and the treatment they receive.

To build on this effort, a 1997 National Performance Review report, World Class Courtesy–A Best Practices Report, provides a framework to move government toward private-sector standards for customer satisfaction. The report demonstrates how to change organizational culture, improve leadership, give employees greater flexibility in satisfying customer needs, offer appropriate training, create customer service performance measures, conduct customer surveys, and provide seamless, courteous service.

Portals: Front Counters for Government

The Five Stages of Government Portals

Portals can be categorized by stages, depending on how interactive or comprehensive they are.

  1. Informational. Allows users to find needed information or services with only a few clicks.
  2. Two-way transactions. Most government transactions are offered online.
  3. Functional, not organizational design. The third stage is functional rather than organizational. Applications are grouped together to make it easier to navigate government.
  4. One-time authentication. In the fourth stage agencies begin to share data, allowing for a single sign on. The portal hides the organizational complexity of government from the user.
  5. Customization and full integration. The fifth stage provides aggregated and customized information to users in the subject areas of interest to them. The applications can draw needed data from available government sources to complete a transaction. This requires government databases to be interactive and to share information.

SOURCES: Adapted from P.K. Agarwal, former chief information officer of the California Tax Franchise Board; Government Technology magazine; and Deloitte Research.

Fortunately, many in government are beginning to understand the importance of seamless customer service. Over the past year, hundreds of state and local governments have launched ‘portals’ on the Internet that serve as the virtual equivalents of the front counter in a commercial store. A portal is simply a Web site that acts as a single point of entry to government services, organized around common consumer needs, without reference to what agency or level of government is supplying the information or service.

In July 2000, Texas launched a bilingual e-government portal, “TexasOnline,” to provide individuals and businesses with a “one-stop” Internet portal for conducting transactions with state and local government. The portal, which originated as a recommendation of a Governor’s task force on electronic government, is “scalable”—designed to expand to keep up with anticipated state growth. Eventually it should streamline governmental processes ranging from sales taxes filings and payments to professional licensing.

This portal should make it easier to establish new businesses, while existing businesses will be able to conduct both simple and complex business interactions with the state more efficiently and effectively. The Texas portal will provide a foundation for the state’s effort to build a truly electronic government and may eventually serve as a point of entry for local governments throughout Texas as well.

A similar effort is Washington state’s “Access Washington” portal, which offers its citizens the same sort of personal service they’ve come to expect in the business world, with unprecedented access to state information and services through a secure Internet connection. Businesses can pay excise taxes through the Access Washington Web site. Certain companies can pay industrial insurance premiums and file Unemployment Insurance tax and wage reports online as well. The site also allows citizens to purchase copies of vital records such as birth and death certificates and apply online for admission to colleges and universities in the Washington state system.

Washington state’s chief information officer, Steve Kolodney, explains the role the portal plays in his state this way:

We’re building the amusement park and the agencies are building the rides. Our job is to create a sense of the park—a place that people want to come to that will engage their interest. The agencies’ job is to build and operate interesting rides that don’t break down and that leave the customer happy with the experience.[3]

Australia’s Centrelink is an even more ambitious portal that assembles a wide variety of social services from eight different federal departments as well as various state and territorial governments “under one roof.” Centrelink offers a combination of office-based services and an extensive selection of Internet services involving around 2.5 billion online transactions annually.[4]

The Netherlands’ “Public Counter 2000” project, founded in 1996, is designed to employ information technology to provide seamless, coordinated services to the nation’s citizens on a 24-hour basis (see Figure 2-2). The project is based on two fundamental concepts, Internet use and the integration of government services from the customer’s point of view. This has required a rethinking of government into “front counter” and “back office” categories. The integration of services provided to citizens via the “front counter” requires the careful coordination and cooperation of administrative and process functions in the “back offices” of various federal, regional and local governmental units in Holland.

After a successful three-year pilot project (1996-99), Public Counter 2000 is being expanded to include an economic counter, a counter for building and housing, one for health and welfare, and a fourth, the work and income counter. This organizational scheme classifies government services by life events, such as starting a company, building a house, or looking for a school or retirement center.[5]

While such examples vary greatly in size and scope, the most important fact is that initiatives like them are springing up every day and paying off for citizens. A recent study from Deloitte Consulting, At the Dawn of e-Government: the Citizen as Customer, found that customer-centric governments “achieve nearly 50 percent more success in providing easier customer access, increasing service volume, getting better information on operations, reducing employee complaints, reducing employee time spent on non-customer activities, and improving their own image.”[6]

Strategies for Customer-Facing Government

Strategies in Brief

  • Create a Virtual “Front Counter” for Texas Government
  • Make it Easier to do Business with the State
  • Reorganize “Back Office” Functions
  • Increase the “Transparency” of Texas Government
  • Integrate Services Across Different Levels of Government
  • Bring Internet Access Closer to All Texans

Create a Virtual “Front Counter” for Texas Government

Texas government is decentralized and fragmented by design. The state constitution and state laws reflect the attitudes of many Texas citizens in dividing responsibility among many state agencies, boards, and commissions. Nevertheless, the result has been unnecessary overlap and duplication.

A complete reorganization of Texas government, involving the destruction of old barriers and the creation of a totally new structure, will not happen overnight. Fortunately, information technology has shown that government can be reorganized “virtually” in a relatively short period of time to better meet the needs of its citizens. The Internet easily can cut across organizational boundaries, simplify access, and provide information so existing government structures can better suit customer needs. For example, while several agencies may be involved in corporate registration and taxation, a single, simplified Web site could help businesses comply with all necessary state laws without navigating a maze of government departments.

Texas’ state portal is the first step in creating customer-facing virtual government. The portal began in July with links to the Comptroller’s “WebFile” and franchise tax corporation search functions. It soon added several other links and the opportunity for online bill payment (see Figure 2-3).

TexasOnline is still in its earliest stages. Today, the portal merely links its users to individual agency applications. To file sales taxes, for instance, a business owner would click on an icon to be linked to the Comptroller’s system. Each service then requires its user to log on separately with an ID number.

Eventually, TexasOnline will feature a central database and an authentication process that will let users submit their information and user ID only once.[7] If a Texan wants to renew a real estate license online, all he or she will need to do is to pop up the TexasOnline site, check a box for real-estate license renewal, submit a password ID and other required information, and print out a permit.

Texas’ portal, however, is only one component of customer-facing government. Much more is involved.

The “Stovepipe” Syndrome

Texas faces numerous challenges in creating a single “face” for state government. Possibly the most difficult has been called the “stovepipe” problem—the tendency of organizations to focus almost entirely on their internal operations and view the world solely through their own “silos” or “stovepipes” that exclude most external considerations. A survey of federal, state and local e-government leaders by Forrester Research named “siloed departments” as the number one barrier to moving services online.[8] In the case of Texas state agencies, the stovepipe mentality leads them to do little to coordinate their efforts, either in service delivery or technology, and renders them unable to see the state as a single enterprise.

Hallmarks of
Customer-Facing Government

  • 24/7 access
  • Single “face” of government
  • One-stop shopping
  • Single-minded devotion to customer service
  • Customer-centered privacy policy
  • Self-service Web sites
  • Cross-boundary coordination
  • Community value

SOURCE: Adapted from American Management Systems.

In Texas, agency planning processes fail to encourage them to collaborate on projects or services. Instead, each receives its own appropriations and makes its own plans, regardless of any duplication or waste produced by overlapping missions. For instance, the state rarely invests in information technology (IT) initiatives that offer high value, but require long-term, interagency collaboration. The planning process tends to discourage IT projects that cross program and budget-year boundaries.

The State of Virginia has dealt with the stovepipe syndrome by creating a Council on Technology Services, an interagency management group charged with hammering out statewide policy on technology standards, procurement strategies, digital signatures and other key issues. The 23-member organization includes representatives from every major state department, as well as from a number of educational institutions and local governments. Virginia’s Secretary of Technology, Donald Upson credits the council with helping to break down the stovepipe mentality in Virginia government.[9]

Virginia is also one of numerous states in recent years to create or elevate the position of statewide Chief Information Officer (CIO) to the Cabinet level and to invest that individual with considerable authority over state IT spending and policy. One of the major roles played by state CIOs is to drive the adoption of an “enterprise” approach to state IT and e-government efforts, meaning state government as a whole is redefined as one enterprise. The CIOs use their considerable clout to require agencies to collaborate and to focus their business processes and technological resources on customer service. By coordinating the establishment of IT systems that can share data easily, for example, agencies can eliminate duplicated effort and greatly improve the efficiency of their information sharing and data-gathering.

In the fall of 2000, Florida moved most state IT spending from the agency level to the enterprise level and put it under the control of the state’s CIO, who reports directly to the Governor. The considerable cost savings that is expected to be generated from this move—by eliminating the duplication and fragmentation in Florida’s information systems and achieving greater economies of scale—will be used to help fund the state’s ambitious plans for e-government.[10]

Texas has a strong tradition of decentralized government and, unlike the states cited above, has neither a strong CIO nor a cabinet form of government. One result is that the stovepipe syndrome is both more pronounced here than in many other states and harder to fix within the current structures of Texas government. Bold action from the state’s legislative and executive leadership and a willingness to break with past practices will be necessary for Texas to achieve a government truly oriented to citizens and businesses.


Establish a Program Management Office to coordinate Texas e-government efforts.

Successful customer-facing technology initiatives need strong leadership at the executive level. Modern technological functions are so pervasive and so vital that they should no longer be delegated strictly to IT departments. IT has become more than a tool to support back-office operations; it can be used to reshape the most important public-sector strategies. Digital government is the focus of many governmental entities, and the initiatives will cross not only state agencies but other governmental units as well. There is a need to approach these projects not just from an agency perspective but from a statewide perspective—at the “enterprise” level.

Texas state government must begin to operate more as a single enterprise to make wise decisions, take advantage of new technologies and realize the greatest return on its IT investments.

An enterprise-wide Program Management Office should be created to provide coordination that is not currently available for cross-government IT projects. As a repository for best practices with a focus on project management, agencies would not have to re-invent implementation strategies and projects would not have to be implemented in “stovepipes.” It could be used to ensure that projects meet the strategic objectives of the state, increase operational productivity by helping to standardize project approaches, provide project management expertise and standardized reporting on project progress and costs. IT projects could be managed better with more effective information and risk management. Ultimately, the PMO would work to overcome the stovepipe mentality of the past where each agency operated in isolation and competed for state funds; reduce the cost of government; and enhance service to its customers through strategies, policies and processes that improve the management of information technology projects.


Develop robust information portals for key functional areas within state government.

The state should start by developing an environmental and natural resources information sub-portal and a health and human services sub-portal (see Chapter 3 for a more detailed description of the HHS proposal) within the statewide portal. The environment and natural resources portal, for example, would require the coordination of all the state’s environmental and natural resources agencies and would provide a one-stop center for environmental, natural resource, and regulatory information and services. Once these sub-portals are underway, other agencies should look for opportunities to better serve their on-line customers. Other opportunities for collaboration at the sub-portal level include the Comptroller’s office and the Secretary of State for business information and transactions and criminal justice and public safety agencies for corrections, public safety, and crime information.

Make It Easier to do Business with the State

Texas is a great state, but dealing with Texas state government can be a frustrating and exhausting experience for citizens whose hard-earned tax dollars go to finance a government they often cannot possibly comprehend or navigate. Frustrations in establishing what is required to open a business in Texas can be enough to discourage budding entrepreneurs from carrying out their plans, or divert established out-of-state businesses to other more business-friendly areas.

Texas has a powerful incentive to facilitate a “business-friendly” state. New enterprises help to increase the tax base of the state and strengthen the state’s economy by breeding jobs and economic growth. Texas state government should not be part of the problem, but part of the solution.

Millions of Texans obtain business or professional licenses and permits annually. But all too frequently citizens hoping to start a business in Texas need to wade through 901 separate categories of licenses and permits that are issued by 91 individual state agencies and licensing authorities.[11] While the Office of Permit Assistance in the Texas Department of Economic Development presently provides some online support and direction to citizens trying to track down the right state licensing or permitting agencies, more can be done to help these people enter Texas markets.

Alaska, California, Connecticut, Maryland, Michigan, Pennsylvania, and Washington let citizens apply for and receive licenses and permits online. Not only do these services benefit existing businesses, they also provide convenience and savings of both time and money to new business startups—when such help is most needed.

By moving licensing and permitting online, Maryland has drastically reduced the time formerly taken to issue licenses—from two weeks to around ten minutes. Maryland’s Department of Labor, Licensing and Regulation (DLLR) began its online licensing program by focusing on those occupations most likely to be avid computer users, beginning with Real Estate occupations. Response from the regulated community has been overwhelming—far in excess of initial projections. As of April 2000, more than 90 percent of Real Estate Appraisers renewed licenses online and 83 percent of Certified Public Accountants used the new system. By that time, the state had enabled online licensing for 18 occupations using 130 separate licensing forms. [12]

Pennsylvania’s “PA Open4Business,” launched in mid-1999, has a feature called an “Online Entrepreneur Interview” which queries entrepreneurs about the type of business activity they are proposing. Based on a series of questions, the links within the system will take an applicant to the various forms that need to be filled out. For instance, a machine shop owner who indicates she will be hiring employees, will be linked to the appropriate form for hiring employees. It also builds a profile for the business and its needs, and keeps all the necessary forms in a “briefcase.” The Web site recorded more than 1 million hits in its first five months of operation—40 percent of the users visited the site after normal business hours, reinforcing the value of providing service twenty-four hours a day, seven days a week.[13]

Citizens should be able to obtain needed business start-up information from one single and convenient place, regardless of business type or permits required. Online licensing should be the norm, not the exception. And non-profit organizations and local governments should have the option of electronic grant application processes for state and federal pass-through funds.

No More Waiting in Line to Renew Your Driver’s License
Next to a tax audit, one of the most dreaded encounters the average person can have with government is a driver’s license renewal. Everyone knows the drill: take a few hours off from work, fill out forms, and schlep from one line to another until, before you know it, a good part of the day is gone. It’s about as enjoyable as a root canal. But it doesn’t have to be this way.

Since December 1999, Virginia residents have been able to renew their drivers’ licenses from their homes or offices. With a customer number, a PIN, and their date of birth, Virginia drivers can renew their licenses online and receive the new license by mail within three days. Virginia needed only five months to develop this system at a cost of just over $236,000.14

Virginia isn’t alone in offering this degree of convenience. Arizona has begun allowing its citizens to conduct a number of transactions with the state’s motor vehicle department online, including driver’s license renewals, and expects to save $1.25 million annually when its online motor vehicle application system is fully implemented.15

Other states are following suit. Arkansas, New Jersey, Arizona, and Tennessee expect to offer on-line license renewals by the end of 2000, while Colorado, Florida, Indiana, Louisiana, and Maine are gearing up.

Texas will soon join the list as well. Working with a private vendor and the Comptroller’s Treasury Division, the Texas Department of Public Safety (DPS) is building a system that will allow drivers to renew driver’s licenses and pay renewal fees over the Internet by February 2001, through the state’s TexasOnline Web site.

At present, Texas drivers can renew their licenses by mail every other time it expires, provided that they are aged 21 or older and have good driving records. (Drivers are required to visit a DPS office every other time for an eye exam.) DPS charges an additional dollar for mail-in renewals. The same policies will apply to online renewals.

“Online licenses should make lines at local DPS offices a not-so-fondly remembered thing of the past,” says Comptroller Carole Keeton Rylander.


Provide online one-stop shopping for businesses.

The Texas Department of Economic Development (TDED) needs a customer-friendly, one-stop online service for entrepreneurs trying to set up a new business. Starting a new business or expanding an existing one can be an exciting and rewarding, yet intimidating, endeavor. The length of time it takes for a business to comply with state and local requests only serves to decrease state revenue and increase the frustrations of the new business owner. Thus, it makes sense that local and state governments should be partnering to best serve the needs of those trying to build a business.


Offer online occupational and professional licensing through the portal.

Twenty-two state agencies that currently provide professional or occupational licensing should provide an online licensing alternative through the state portal. Regulated citizens should have round-the-clock access to state licensing processes and be able to comply with required state laws at their convenience. Online licensing can be conducted much more efficiently than current paper-driven processes and promises to free resources which can be redirected for other agency uses or returned to the state treasury.


Offer electronic grant application processes for nonprofit organizations and local governments.

At least thirty-five state agencies distribute state-funded and federal pass-through grants, largely through paper-driven processes. Electronic grant application processes would enhance customer service and improve efficiencies of operation for both the state and its customers. The Federal Financial Assistance Management Improvement Act of 1999 was signed to require federal agencies to improve the performance and effectiveness of grants, improve delivery of services to the public; facilitate delivery of the services for better coordination; and improve the effectiveness and performance of the Federal financial assistance programs.


Conduct vehicle lien transactions electronically (“e-liens”).

Currently, when a vehicle is purchased using borrowed funds, the Texas Department of Transportation (TxDOT) mails the original, negotiable title to the lien holder. TxDOT mails about 2.6 million titles to lien holders annually. The lien holder, which is usually a financial institution, keeps the title until the loan is paid off. Then, the lien holder signs the title and gives it or mails it to the vehicle owner. This process requires the lien holder to receive the title, file it, and store it for several years before releasing it to the owner. This process could be better handled electronically, eliminating the printing, mailing, filing, and storing of paper documents.

Reorganize “Back Office” Functions

The initial creation of a single, customer-friendly face for customer contact with state government can be completed without any fundamental reorganization of the departments, agencies, or programs involved. Such reorganization must eventually occur, however, if the duplication and overlap inherent in the state’s present organizational schemes are to be eliminated.

E-Texas task forces found scores of examples of fragmentation, duplicated effort, and overlap in the course of researching this report. One example concerns state efforts aimed at preventing and cleaning up oil spills. The General Land Office (GLO) is responsible for programs involving oil spills of more than 240 barrels in coastal waters, while the Railroad Commission (RRC) handles smaller oil spills in coastal waters, as well as all oil spills involving surface and subsurface waters. The Texas Natural Resource Conservation Commission is responsible for the prevention and cleanup of all types of pollution, and handles any spills involving hazardous materials, but not crude oil. Other agencies, such as the Department of Health, Parks and Wildlife Department, and the Governor’s Emergency Management Division also are authorized to participate in cleanup operations under the state’s coastal discharge contingency plan.

Other fragmented program areas involve energy conservation and finance. Three state agencies—the GLO, RRC, and the Comptroller’s State Energy Conservation Office—operate independent programs to promote certain types of energy conservation. And despite the fact that most financial regulation is conducted at the federal level, Texas has a state banking department, a state securities board, a commission for consumer credit, and a credit union department, each with unique duties and responsibilities for different aspects of financial services.

Governmental fragmentation exists at the local level in Texas, too. City and county governments are notorious for the duplication and overlap of authority. Parks and recreation, public housing, public works, and information systems are all service areas where cities and counties tend to perform very similar functions. Just figuring out whether it is the city, county or special district—or more than one—that actually is responsible for a service can be an immensely time-consuming and frustrating task. In many communities, taxpayers have to go to both the city and county tax assessor to pay their property taxes.[14]

The “virtual” reorganization of government through portals inevitably will highlight areas of inefficiency and waste and help to illustrate which programs are most effective at achieving their objectives. It will provide state and local policymakers with a side-by-side comparison between the customer-friendly government existing on the Web and the complex and sometimes wasteful bricks-and-mortar version. “The Hollywood storefront [the portal] works well for the citizen and initially will mask the turmoil behind the veneer,” explains Washington state’s Kolodney. “But growing electronic transaction demands will put a lot of pressure on the stovepipe mentalities of agencies and eventually force a day of reckoning.”[15]

The Gartner Group, in their analysis of e-government, also maintains that the increased transparency of the internal operations of the public sector brought about by e-government will put serious pressure on governments at all levels to reorganize. According to the report:

EGov sites will put a public face on bureaucratic redundancies... Once constituents and lawmakers see the structure of their government laid out before them on the Web, they will ask why departments like the Centers for Disease Control and Prevention and the National Institutes of Health offer so many overlapping services. Pressures to reorganize at all levels will soon follow.[16]

When the Ontario government developed a strategy that organized service delivery around its customers, instead of its bureaucracy, it realized it had to change its organizational structure as well. Ontario created a chief information officer to maintain its strategy and be accountable for a common infrastructure, corporate vendor relations, public access, security, and the professional development and career progression of IT staff. Ontario also has seven chief information officers who serve ministry or business “clusters,” rather than each ministry having its own information technology organization. Each CIO is responsible for information and information technology for a group of ministries, including business-specific applications and vendor relations. Ministries are grouped logically, by business line, and this concentrates resources that were previously deployed among several ministries. Information management plans prepared by each organization are closely aligned with ministry business plans.

Protecting the Security of Citizen Information

Many transactions with government require citizens to provide potentially sensitive personal information. A wide variety of statutory requirements and limitations apply to the collection and release of tax records, permit and license data, and legal and medical records. Of course, many of these statutes, predate the Internet, which allows data to be collected, stored, compiled, and distributed in previously unforeseen ways. A Federal Trade Commission survey found that 92 percent of Americans are concerned about the misuse of personal information on the Internet.19  It’s no wonder, then, that privacy and security are among the most common concerns surrounding the growth of e-government.[20]

Data security is a very real concern for government agencies. Hackers attack government sites daily. One Web site listed 6,755 attacks on government and military Web sites around the world in June 2000 alone and more than 200 of these were on US sites. High-profile incidents, such as the “denial-of-service” attacks in 2000 and the Melissa and Love Bug viruses, highlighted just some of the problems hackers can cause. Denial-of-service attacks clog an organization’s server with so many false requests that it cannot deal with legitimate inquiries; hackers have used this method to shut down the Web sites of eBay, Yahoo, Amazon, CNN, E*Trade, and the FBI. The online retailer CD Universe had a hacker post 25,000 stolen credit card numbers, names, and addresses of CD Universe customers after the retailer refused to pay $100,000 in ransom for the numbers. In New Mexico, the state highway department was shut down for two days when the Love Bug virus attacked its system. The department estimated that up to 60,000 files in its engineering department alone were infected.[21]

In Texas, security levels vary among agencies. At this writing, the Department of Information Resources is conducting a security assessment of all state agencies. While some variation in security levels among agencies is acceptable due to differences in the sensitivity of the information they hold, minimum standards must be met. Although DIR has set such standards, the Legislature has not yet devised a way to enforce them.

Reorganizing Texas government to mirror a version citizens can interact with on the Web will be an enormous, multiyear task. For now, we have a relatively simple proposal for beginning the process: beginning in the next interim session, when agencies go through the state’s mandatory “sunset” process, the Sunset Advisory Commission should look for opportunities to reduce duplication and overlap by reorganizing their services to more closely mirror the new online organization.[17] The State Strategic Planning statute states that “the Comptroller, the Sunset Advisory Commission, the State Auditor, the Legislative Budget Board, or another agency that conducts performance audits of a state agency shall consider in the evaluation of an agency the extent to which the agency conforms to the agency’s strategic plan.” The words “...and the extent to which state government’s business processes and program structure conforms to its virtual structure,” should be added to the statute.

Michigan Consolidates Its Regulatory Functions
In March 1996, Michigan Governor John Engler issued an executive order consolidating the regulatory functions of the state’s former Departments of Commerce and Labor with those of a number of other agencies to form the Department of Consumer and Industry Services. The department comprises 22 regulatory and service agencies supported by eight administrative support agencies and serves more than 1.5 million citizens. The consolidation of support and regulatory services has allowed the department to improve and streamline services and increase consistency among its regulatory and licensing programs. According to state officials, the consolidation has resulted in better customer service and the regulated community has viewed the changes positively.[18]

Increase the “Transparency” of Texas Government

The notion that “the public has a right to know” has a long and powerful history in America, but it’s a tradition that often is hindered rather than helped by government. While Texans can obtain a great deal of information about their government—if they have enough perseverance—some of it is likely to be unintelligible to all but a few experts. Yet no one should need a lawyer or a policy expert to find out what government is up to. Information technology provides powerful tools for improving the public’s access to such information in easily understandable formats.

Many states already are making efforts to put vital information online. Virginia now offers instant access to official public meeting announcements via the Internet. The Rhode Island Department of Health allows residents to search an online database of the health licenses of doctors, dentists, other health professionals, hospitals, laboratories, and even restaurants, to view license status and any disciplinary actions taken in the last 10 years. New York City now posts restaurant health inspection results on the Internet. On its first day, this site registered 45,000 hits an hour.

But such examples represent only a beginning. Within a few years, concerned citizens should be able to visit Texas’ Web site and find a wealth of data with a few clicks of the mouse, from how much it costs the state to fill a pothole to the environmental record of the new business in town. A survey in the June 2000 issue of the Comptroller’s Fiscal Notes publication asked citizens what they would like to see in a government portal. Most responses were requests for information government already collects but disseminates poorly, such as contact information for elected officials and agencies, highway/road construction news for travelers, crime data for neighborhoods, and health care and social services information.


The TexasOnline State Portal should be used to centralize and provide public access to information relating to special districts assessing ad valorem and sales taxes in Texas.

The Comptroller’s Property Tax and Revenue Accounting sections collect the data on ad valorem and sales tax rates for special districts statewide. General information concerning special districts, (i.e., name of district, district manager, board of directors, services provided, location of district, and ad valorem or sales tax assessed by district), would be posted on the Comptroller’s Web site and the state portal, TexasOnline. It would provide accountability to taxpayers who in many cases are not aware of the services being provided or know who is responsible for assessing ad valorem taxes on their property taxes in their respective communities.[19]

Integrate Services Across Different Levels of Government

Businesses and individuals don’t care which level of government or which government agency does what. They want to abide by the law, but without needlessly wasting time and money. The state, in partnership with local governments, should take steps to provide “seamless” services to its taxpayers. “Seamless” government allows its citizens to obtain multiple services from multiple levels of government via a single contact, increasingly via an Internet portal site.

In an effort to ease the burden of government on business, for instance, Indiana has constructed an Internet site that allows businesses to register projects and then communicate with utility companies, city officials, economic development organizations, and officials at the state Commerce Department.[22]

College Station’s Portal for Local Government and the Community
Municipal services are just one part of the City of College Station’s Web site. In addition to several online services, such as citizen volunteer committee application forms, drainage service requests, and public works contact forms, the site also offers an “Electronic Village,” a portal to community businesses and organizations. Thus the site functions both as a governmental portal and a tourism guide.

Local government Web sites should be linked together through the state portal to achieve the goal of a coherent, uniform portal for online services regardless of what level of government is involved (see Figure 2-4). Whether a citizen wishes to renew a driver’s license, apply for a marriage license, or pay a parking fine, the citizen would simply select the desired transaction from the portal’s list.

Intergovernmental integration may be the most difficult and complicated stage of e-government, but it also has the potential to be the most important step for taxpayers. One of the hallmarks of the New Economy is the need for speed: time has become an extremely valuable commodity. If Texas can significantly reduce the time required for businesses to comply with governmental regulatory and permitting processes, we can provide our state’s business community with a competitive advantage in the worldwide marketplace. “The Internet has leveled the playing field,” says Steve Papermaster, CEO of Agillion, an Austin high-tech company. “Competition exists today like no other point in time, and it is coming from everywhere. Texas is competing with forces that are global now.”[23]

Regional Coordination of Building Permit Process
The Smart Permit project seeks to transform the community development process in California’s Silicon Valley region through the use of Internet technology. The project, a public-private partnership among local officials, corporate representatives, civic entrepreneurs, and technology companies, is developing a regional approach to community development, featuring online applications, permit tracking, architectural drawing submission, digital signatures, permitting systems, and regional geographic information systems.[24]


Integrate local government Web sites into the state portal.

Some large cities and counties will build portals of their own, but the majority of Texas counties, cities, and other political subdivisions are generally less likely to be able to justify the cost of building their own portals (see Figure 2-5). The state portal can share the infrastructure it has developed with local governments and create a more useful vehicle for Texas taxpayers. Counties and cities that develop separate community networks should tie to the state portal as well, to maximize its usefulness for all Texans. Many cities and counties have common permits and licenses. “Hosting” these at the state portal would help citizens in transacting business and save local governments money, while providing them with application and transaction security.


Create an electronic data clearinghouse.

Local governments must provide numerous reports to state government, many of which require similar information. When asked which of these is the most troublesome, Denton County Auditor James Wells replied:

None of [these] reports are exceptionally difficult to prepare. There are simply so many of them that they are very time-consuming. The real problem is that they are all required to be submitted on preprinted forms that must be typed or handwritten. Most agencies do not...allow electronic filing of the reports over the Internet, and only [one] provides the reports in diskette form.... [W]e only have two typewriters in the office, although everyone has a PC with Internet capabilities. So, the biggest improvement for us would be to allow electronic filing or even to provide us report form templates that could be filled in using Word or Excel.[25]

State government should partner with local governments, federal agencies, the Texas Association of Counties, and the Texas Municipal League to research and develop an electronic data clearinghouse to capture and report local government data. The goal should be to allow local government computers to “talk” with the state system to deliver data needed to satisfy state and federal reporting requirements. Local governments then could drastically reduce the time needed to prepare these reports by programming their systems to provide data conforming with the requirements of the statewide database and transmit them electronically to the state at prescribed intervals.

One of the greatest benefits of this partnership would be the ready availability of data for state and local decision-making and public accountability.


Amend state law to allow local governments to participate in the Telecommunications Infrastructure Fund (TIF).

The State of Texas’ Telecommunications Infrastructure Fund (TIF) was created by the Legislature in 1995. TIF is governed by a nine-member board of directors charged with disbursing about $1.5 billion in loans and grants to fund various technology-related projects or applications and to support the development of a telecommunications infrastructure connecting “eligible public entities,” which currently include public schools, public libraries, two- and four-year colleges and universities, and public health care deliverers.[26]

State law should be amended to allow city and county governments to be eligible to receive TIF funding for their participation in collaborative community networks. The New Economy is being built around economic networks, not political subdivisions. Consequently, public policy should encourage community networks of school districts, colleges, universities, public libraries, health care facilities, cities, counties, and the local offices of state agencies. Expanding the TIF program to include cities and counties would complement the legislative intent and spirit behind the law.

Bringing Internet Access Closer to All Texans

The term “digital divide” surfaced many times in our public hearings and interviews on e-government. The digital divide generally refers to the technology gap that exists between those who have access to computers and the Internet and those who do not. It sounds simple, but it is an extremely complex issue. There is considerable debate about the size of the divide; how fast it may be going away; and whether government can help without wasting tax dollars or causing unintended consequences. However, one thing is certain: people who cannot access electronic information will soon be at an enormous economic, technological and educational disadvantage in a world where our economy and communications are becoming more reliant on information technology for transacting business and communicating needs and services.

Recent studies and surveys seem to show that there is a digital divide, but it is closing rapidly. For the first time, a majority of all households in both Texas and the US as a whole now have access to the Web.[27] Nationally this represents a 35 percent increase in just one year. Racial differences in Internet use do exist but also are fading. According to a Spring 2000 survey conducted by the University of Texas, 68 percent of Anglo Texans used the Internet, compared to 45.2 percent of Hispanics and 32.8 percent of African Americans (see Figure 2-6). Nationally, African-American households are increasing spending on computers at a rate 14 times faster than Anglos.[28]

Cities, school districts, the federal government, computer companies, and private corporations also have been aggressively taking steps to close the divide, including putting computers in schools and libraries, introducing very low-priced computers and free Internet access, and opening free computer clubs and training centers in the inner city.

Continuing to close the digital divide will require two major actions from state government. First, by improving our education system so all Texans can navigate their way around new technologies, and second, by enhancing the telecommunications infrastructure so more Texans will have access to the Internet and other technologies. The education component of this equation is addressed more fully later in this report. In Chapter Seven, we lay out a series of recommendations to improve K-16 education and in Chapter Eight we outline how adult education should be reformed to meet the demands of the New Economy. We believe the recommendations in these chapters, if adopted, can provide more Texans of all ages with the skills necessary to work and learn in the digital age.

With regard to improving the telecommunications infrastructure, the state’s major focus should be to bring Internet access to more rural Texans. Very few rural areas have high-speed (broadband) access. They may have a local line and a local Internet Service Provider (ISP), but it may take a long time to actually make a connection.[29] And the cost to access these local lines is usually higher than in urban areas. According to the UT survey cited earlier, rural residents report they have less Internet access, it is too expensive, and broadband connections are needed.[30]

Broadband technologies like Digital Subscriber Line (DSL) and cable modem service have been slow to reach rural America. According to a report issued by the US Department of Commerce, about one percent of towns with fewer than 10,000 people have cable modem service compared with 72 percent of cities with more than 250,000 residents.[31]


State law should be amended to include telecommunications infrastructure in the Economic Development Corporation Act’s definition of a project.

Amending the Economic Development Corporation Act of 1979, which was created to give cities and counties the authority to encourage economic development, will allow cities and counties to develop projects related to implementing the infrastructure necessary to provide broadband or some similar access to the Internet.[31] Amending the statute would give cities an opportunity to pass bonds or implement a sales tax option (based on voter approval), thereby enabling rural communities to develop programs that meet their specific needs.

e-Texas is an initiative of Carole Keeton Rylander, Texas Comptroller of Public Accounts
Post Office Box 13528, Capitol Station
Austin, Texas

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