State government incarcerates prisoners and builds roads. In almost every other activity of government, however, information processing is the essential process in service delivery and public policy implementation. Collecting revenue is the process of accepting data about earnings, analyzing that data against algorithms and other rules to determine taxes owed, and then issuing both invoices and refund checks. This process is an almost totally automated IT activity. Consider the functions of health and human services agencies.
States then manage files and reimburse care providers, or issue checks directly to recipients.
These are very IT-intensive activities, and with the advent of block grants, states will take on even more responsibility for these functions. The difference between the views of Bayh and Thompson is the difference between an old world view of IT and the new wave. So on principal, the more progressive position of Thompson must be considered the more accurate one. Outsourcing is a valuable tool. Michigan has led in the effective use of outsourcing with its end-user computing environment and data center operations.