Jim Willis, the Director of eGovernment for the Secretary of State in Rhode Island, is talking about the use of open source in the Rhode Island's eGovernment projects. The eGovernment project is in the Secretary of State's office and the Secretary has the authority to determine what format the regulations filed with them will take. Not all states have a single repository of regulations (Utah does, in the form of the Administrative Rules division), but for those that do, this is a very powerful piece of authority.
Willis makes that argument that because Government data should be open, the formats that it is stored in (and hence, in most cases, the tools used to create it) should be open as well. I think there's a good archivist statement in there, but my experience is that state's pay more lip service to their archiving responsibilities than anything else. Still, its a plank in the platform and should be made.
A second point for open formats is that interoperability is easier, and as a result development faster, when data is stored in open, flexible formats. That allows lots of small parts to be developed and used together. You write code to glue these parts together. This is essentially the Web Services argument, made without explicitly mentioning the XML kernel.
WIllis gives the example of being able to write a small tool in a few hours that reads Rhode Island's standard data format and dumps it into iCalendar (via PHP-iCalendar) to create calendars from data that originally had some other purpose. This is an important concept. It won't come as a surprise that I'm big on this topic. I think states should pay much more attention to open data in standard formats. As an aside, the tool publishes calendars in iCalendar format so that you can subscribe to them and see them on your own calendar tool rather than having to continually go out and check the site. This is the kind of subtle interoperability that makes a big difference. Witness news aggregators, RSS, and weblogs.
One of the applications that Jim demonstrated tracks legislative bills (apparently the job of the Sec. of State). I've written about this problem before. Jim claims that the application is flexible enough to work for most states. I think it would be great to have a single legislative tracking application for a number of states. There are many groups who are affected by legislation in more than one state. Some conformity in tools could allow a single, usable interface to multiple state legislatures.