While some sectors of the economy are showing positive signs, budgets in key states around the country continue to linger “in the red” as rising unemployment and reduced spending have decreased income and sales tax revenue, respectively. According to a recent Financial Times article, despite receiving federal stimulus money, 46 of the 50 states show a whopping $142.6 billion shortfall in their cumulative 2010 budgets.

Some states, however, are proactively turning toward innovative IT initiatives to achieve greater efficiency in their tax collection process– with the goal of extracting the greatest value possible from their underfunded budgets.

For example, one of Metastorm’s state government customers used Metastorm BPM® as a foundation for developing a streamlined, simplified and centralized system for managing liens and tax information within its Department of Revenue—the department that is responsible for collecting personal income tax, sales and use tax, all corporate taxes, inheritance tax and all other state taxes. The department used BPM to develop a single system that houses all tax data—allowing employees to easily access taxpayer information in real-time, and more accurately enforce the collection of delinquent accounts. Prior to implementation, it took the department up to 4 weeks to research and gather information on particular tax liens. Now it takes less than a day.

The reality is that states will continue to struggle with budget deficits as the country weathers the current economic storm. Fortunately, however, as governments reevaluate their IT spending to best utilize their resources through business process management and enterprise architecture initiatives, their overall efficiency will be greatly strengthened today and in years to come.

Because states cannot best utilize funds without perfecting their collecting process, a great starting point for these initiatives is leveraging BPM to create efficiencies in the area of tax revenue collection.

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