Nebraska’s government website provider has the state over a proverbial barrel since it halted new online development projects more than a year ago, asking the state to kick in hundreds of thousands of dollars for the upgrades to its software.

Tyler Nebraska, which keeps 80% of the transaction fees charged each time someone makes an online purchase from nebraska.gov for such things as auto registration and driver’s licenses, made $1.4 million in 2022.

Yet it wants the state to pay for the upgrades, which the company is contractually obligated to make.

Last December, Secretary of State Bob Evnen, in his position as chair of the State Records Board, suggested that the board pay 50% of the bill, which could run up to $750,000, using the $4 million in the board’s cash fund generated by the 20% of the transaction fees.

The board, however, rebuffed Evnen’s suggestion, pointing to the contract that makes the company responsible for the updates, and voted in March to seek other developers to work on state agency websites.

But an organizational shakeup at Tyler Nebraska, Evnen said, has eliminated the need for the Request for Information process authorized by the board in favor of letting Tyler complete the updates, which now have been delayed for 18 months and make amends for its previous failures.

That drew the ire of State Auditor Mike Foley, who rightly suggested that the state examine how it does business online, which has routed its business through a single provider since 1996.

That led to Foley to characterize the state as being in a “hostage situation” with Tyler Nebraska.

If “hostage situation” is a fair description, the state certainly helped enable it, but Foley’s point that the company had no competition for the web development job and could demand payment from the state by withholding services is well taken.

Tyler, for its part, says it is now working on the updates and intends to fulfill its contract and return to good relations with the state.

But it remains unclear how the situation will be resolved. Tyler will continue to do its work. Evnen, under pressure from the board, agreed to release an RFI by December.

That could lead to additional developers or a replacement for Tyler, as a debate continues over whether state law requires a single developer.

Regardless of how it is resolved — and we trust Foley will make the process transparently and fiscally and legally accountable — no money from state funds should go to Tyler Nebraska for the updates that it is obligated to provide to the state, from which it has made millions over the years.

This editorial first appeared in the Lincoln Journal-Star on November 9, 2023. It was distributed by The Associated Press.