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Screenshot of Michigan.gov

LANSING, MI -- The Snyder administration is looking to overhaul Michigan.gov in order to improve the user experience for "customers," but critics say a proposed funding mechanism could end up costing the residents it purports to serve.

The Michigan Secretary of State currently sells motor vehicle records to third-party aggregators who repackage personal data for auto insurance companies, who in turn use the information to set rates, give quotes and seek new customers.

The administration wants to increase the fee for obtaining those records by $1 or $2, according to Michigan budget director John Nixon, raising between $3.5 million and $7 million a year to contract with a third-party developer for a major website upgrade.

"We want to make sure that the public, when we're selling their data, we think it's incumbent upon us to get the best value we can to provide services for them to be able to interact with state government," Nixon said Tuesday after a meeting of the the House Transportation Committee, which is considering legislation that would allow the state to put out a request for proposal for the web upgrade.

Nixon, in testimony before the committee, insisted that motor vehicle records are a state asset and, as such, the government should have the ability to sell that asset to for-profit companies at any rate the market demands. About 20 other states have adopted a similar "self-funded" model for website upgrades, Nixon said, while Michigan has fallen behind with its aging web design and outdated features.

"Gov. Snyder is one of the most tech-savvy governors in the country," Nixon told lawmakers. "He's got this vision of a customer-centric government and taking government to people in the way they want to interact with the state. They don't care that we've got multiple departments, they just want to know where to get their transactions done."

The insurance industry, as one might imagine, is opposed to the legislation, suggesting that higher fees for driving records will inevitably lead to higher rates for motorists.

"The funds are going to be used for web portal development for the entire state, which we obviously would support," said Peter Kuhnmuench, executive director of the Insurance Institute of Michigan. "Greater access, more efficient access for the public is a good thing, but asking one sector of the business economy to fund this entire statewide portal effort is inappropriate."

Similar legislation previously stalled in the Senate, and if Tuesday's initial committee hearing was any indication, the re-introduced bill could face some opposition in the Republican-controlled House.

State Rep. Pete Petallia (R - Presque Isle), said he sees the proposal as a direct user fee on Michigan motorists and noted that he'd rather see the state use a portion of the current budget surplus on website upgrades.

"It just seems like we keep on charging different user groups for all that we try to get done in Michigan," Petallia said after Tuesday's hearing. "When is it time for government to say this is best for all of us here in Michigan, and it is our responsibility to fund it rather than reaching out and targeting one group or another to draw on a steady funding stream?"

Editor's note: This story was updated to reflect accurate revenue projections from Michigan Budget Director John Nixon.

Jonathan Oosting is a Capitol reporter for MLive Media Group. Email him, find him on Google+ or follow him on Twitter.