By NEIL THANEDAR

MICHIGAN CAMPAIGN FINANCE NETWORK

LANSING, MI (July 29, 2025) — There are two Tyler Technologies, a modern corporate Jekyll and Hyde. Here in Lansing, and in state legislature committee meetings and city council hearings across America, you’ll meet the “nice guy” Tyler, somberly apologizing for failures and delays and promising to do better soon. But in Wall Street, you’ll meet an entirely different $TYL, loudly boasting about accelerating recurring revenues and free cash flow. This is an investigation into both Tyler Technologies.

The State of Michigan is Tyler Technologies’ latest victim. Tyler’s problems in Michigan started in 2021 when they acquired NIC, the creator of MERTS, Michigan’s campaign finance system since 2000. MERTS met all of the Michigan Campaign Finance Act’s requirements, but was “antiquated, inefficient, and had consistent problems that required significant updates” according to Tina Anderson, Chief of Staff for the Michigan Department of State. So in July 2022, the State of Michigan issued a request for proposal on behalf of MDOS for a new campaign finance system, named the Michigan Transparency Network (MiTN). Tyler Technologies “won” this contract by being the only qualified bidder.

How is one company, Tyler Technologies, dominating 15% of the $13 billion public sector software market? How did Tyler become Michigan’s problem? And how can local and state governments like Michigan get out of this mess? This investigation covers all of these points.

How Tyler Technologies Got Started:

Tyler Technologies was always a financial product. It originated as Saturn Industries in 1966 with the acquisition of three government companies from American conglomerate Ling-Temco-Vought (LTV). In 1968, they acquired Tyler Pipe, an iron pipe manufacturer, which quickly became the top revenue and earnings division of the company and helped take the company public on the New York Stock Exchange as Tyler Corp. by 1970.

Tyler transformed again in 1998 with the acquisition of three government software companies and pivoted in 1999 to focus their business on “servicing the unique information management needs of local governments.” This timely reinvention catapulted them into Wall Street’s big leagues. Tyler Technologies became the first pure gov tech company to make the S&P 500 index in 2020. Now with a $500+ stock price, $20+ billion market capitalization, and 7,000+ employees in 56 offices around the world, Tyler has established itself as the nationwide leader in providing software to local and state governments.

Acquisitions are still a key part of Tyler Technologies’ strategy. In 2021, Tyler acquired NIC, one of its biggest competitors in local government solutions, for $2.3 billion. This meant that Tyler now owned the creator of MERTS (Michigan Electronic Reporting & Tracking System), which had been the State of Michigan’s platform for campaign finance disclosure system since 2000. When it came time for Michigan’s State Administrative Board to choose a software vendor in 2023 for a modern replacement to MERTS, the winning bid was again from Michigan Interactive LLC, the MERTS creator that was once a subsidiary of NIC and is now doing business as Tyler Michigan.

Michigan Falls into Tyler’s Trap:

Michigan Interactive LLC, AKA Tyler Michigan, was the only qualified bidder for a $9,344,362.56 contract with the State of Michigan to create the new Michigan Transparency Network (MiTN) campaign finance system. The state only got two bids, one from Tyler Technologies and the other from TenX Software. But the TenX bid was disqualified because it lacked “minimum requirements for security”, so Tyler won by default. Tyler’s contract to create MiTN began on May 9, 2023. With an original launch date of July 2024, MiTN’s rollout schedule included MiTN Lobby, MiTN Committee, and MiTN PFD (Personal Financial Disclosures), all set to be operational by April 2025. Tyler failed to hit both of these promised deadlines.

At a Michigan House Oversight Committee Meeting about MiTN on May 20, 2025, state representatives from both parties questioned why MiTN failed to conform to the Michigan Campaign Finance Act’s requirements for electronic filing and online disclosure. Despite promises in that meeting by the Michigan Department of State that “specific fixes” like “bulk uploads and exports” would be available “by July”, these features are still not available today and MiTN’s search and sort tools are still not fully functional. Because Michigan’s old campaign finance system MERTS was shut down when MiTN was launched, the secretary of state risks ongoing violation of the MCFA until MiTN works as promised.



Section 18.1 of the Michigan Campaign Finance Act, which requires that the secretary of state “develop and implement” an online campaign finance disclosure platform.

The “MiTN information” page on MDOS’s website currently lists 85 “Resolved” issues and 35 “Issues we’re working on”, including 17 open issues for MiTN Committee, 1 open issue for MiTN Personal Financial Disclosure, 20 open issues for MiTN Lobby, and 3 open issues for MiTN Contribution Analysis Search. These ongoing software issues prevent citizens and investigative journalists from efficiently accessing and analyzing campaign finance data, which is especially important now with open races in Michigan for Governor, Secretary of State, Attorney General, all State House and State Senate seats, one US Senate seat, and multiple ballot proposals set for 2026, including a Constitutional Convention Question.

It Gets Worse for Michigan:

On June 18, 2025, Tyler Technologies’ $9+ million contract with the State of Michigan to build MiTN was quietly updated to add an “IT Change Notice” adding a subcontractor, BlueGenAI, Inc, who is a federal contractor based in Leesburg, VA. BlueGenAI will be responsible for “developing a full filing extract that is substantially similar to the legacy process, allowing users to download all filing data by year for Receipts, Contributions, and Expenditures.” In other words, in order to make our new campaign finance system do what the old system did, we need to bring in another software development firm.

According to this change notice, BlueGenAI is an expert at the “Application Platform which MiTN is built upon.” This is not disclosed in any of the 289 pages currently attached to the MiTN contract, but a 2024 story on Microsoft’s website shows that Tyler Technologies now uses Microsoft Dynamics 365 as the foundation for all of its applications. This means that despite paying this one subsidiary over $25 million since 2014 on these two contracts alone, the State of Michigan didn’t get custom software that we now own, which would allow us to maintain it ourselves and open source it if we want. Instead, we got a Microsoft ERP assembled by subcontractors like BlueGenAI and sold to us by Tyler. This Frankenstein is expensive to implement and hard to modify or switch. At a minimum, Michigan could save millions by cutting out a middleman.

This Is Not The First Investigation into Tyler Technologies:

In April 2025, Injustice Watch and the Chicago Tribune released their investigation into over $265 million in contracts and costs between Tyler Technologies and local and state governments in Illinois. These projects were originally projected to cost a combined $74.6 million and go live in three to five years. But years of delays by Tyler Technologies have cost Cook County and the Illinois Supreme Court tens of millions of dollars in overruns and oversight over the new software while still paying to maintain the existing software. The April investigation in Illinois found that government officials “wrote sternly worded letters and made legal threats but, faced with the prospects of an even longer schedule and higher costs, decided to stick with the company.”

Illinois is not the other only state fighting Tyler Technologies now. North Carolina is on the hook for over $100 million in software upgrades to develop Odyssey, a new statewide e-filing system. Tyler delivered that platform to NC with at least 573 known defects, leading to “erroneous court summons, inaccurate speeding tickets and even wrongful arrests.” This led to one of 18 federal lawsuits involving Tyler Technologies contracts, including a 2023 lawsuit by the Genesee County 9-1-1 Consortium vs. Tyler Technologies for breach of contract and fraud claiming Tyler “knowingly made false statements about the functionality of its software.”

Government Relations vs. Investor Relations:

Unlike in Robert Louis Stevenson’s story, with Tyler Technologies it was their Hyde that created a Jekyll. The corporation that started as an acquisition-driven hydra was forced to clean up its image once it began exclusively serving the public sector in 1998. Tyler’s PR and government relations like to focus on their “98% client retention rate”, boasting that they’re “the market leader” in the public sector, used in over 13,000 locations. Tyler Technologies sells themselves as the safe software choice for governments. 

What’s left unsaid is that Tyler locks local and state governments into multi-year contracts with no way to cancel, including millions of dollars in maintenance costs required years after sites are completed. For example, Michigan’s contract with Tyler Technologies for MiTN runs through 2029 even though the site is supposed to be done in 2025. Tyler also charged the State of Michigan another $1,283,125 to maintain MERTS for just nine months starting in 2024 during the transition to MiTN. And even when these contracts expire, the high implementation costs and time and complexity required to switch enterprise resource planning (ERP) systems means that, like in politics, the incumbent usually wins.

Tune into Tyler Technologies’ investor presentations and you’ll hear the financial leadership openly brag about these competitive advantages. The “Tyler 2030 Vision” starts with “leveraging installed base” (that means making more money from their current customers) through M&A, flips, cross-sells, and up-sells. The CEO sets the goals to be “recurring revenue growth”, “improved margins”, and “expanded free cash flow”. The CFO celebrates that free cash flow is up “~2x” from Q2 ‘23 to Q1 ‘25 and foreshadows debt repayment and stock buybacks. And the non-GAAP accounting shows a 48% gross margin and 26% free cash flow margin.

According to Wall Street, business is good, with $TYL up over 70% since the start of 2023. Analysts remain bullish on the strength of the company’s “moat” (that means it's hard to compete with them), predicting a decade-long runway for near 10% annual growth. But when the company’s own investors are asked what could hurt Tyler Technologies, they say “a major threat is prioritizing operating margins over customer service”, which is already happening here in Michigan. When will local and state governments start standing up to Tyler Technologies?

What Michigan Can Do Now:

To investigate how Michigan can do better with this contract and future procurement deals, I interviewed David Jackson, Pulitzer Prize-winning investigative reporter at Injustice Watch, who co-led the Illinois investigation into Tyler Technologies, and Eric Lupher, president of the Citizens Research Council of Michigan and past president of the Governmental Research Association, an expert on state and local government policy. I also leaned into my 12+ years leading Labdoor, a consumer watchdog that has served tens of millions of people around the world through web and mobile applications. We all agree that the key to efficiently procuring government contracts is for each local and state department to proactively seek out the best teams or vendors to build their platforms.

Here’s How the State of Michigan Can Get Out of this Mess:

• Short-Term: Use litigation to get out of Tyler Technologies contract by 2026.
• Mid-Term: Use savings to pay for a migration to another cloud ERP.
• Long-Term: Build government platforms using extensible open source software.
• Forever: Open government bidding processes to all companies, not just specialized contractors.

1. Terminate Tyler’s Contract for Cause or Convenience and Claim Damages:

Michigan already paused payments to Tyler in May and received $166,000 in credits from Tyler Technologies in June for the weeks that MiTN was down in 2025. But this doesn’t account for the past, current, and future bugs in this system that put the secretary of state in continued violation of the MCFA. It also doesn’t cover cost overruns and decades of maintenance that have plagued projects like MERTS or Tyler’s contracts in Illinois. And it doesn’t include the possibility that Tyler’s 2024 data breach may have affected Michigan through MiTN and/or MERTS. Given these proven and potential breaches, Michigan is well within its rights to end this contract.

The State’s enterprise procurement and secretary of state’s offices can cite ongoing non-performance to escalate credits and damages and work towards terminating this contract for cause (section 16.1 of the software contract terms). Worst-case, the State could terminate this contract for convenience (section 16.2), and pay for the costs to transition to a replacement software vendor, which we’ll need to do anyway.

2. Find a replacement vendor who can migrate us to another cloud ERP.

The simplest solution for now would be for the State to hire a new software development vendor to integrate MiTN or a new campaign finance site directly into Microsoft Dynamics 365 for Government. The fact that Tyler Technologies already builds its applications like MiTN on this platform should simplify this migration. That should reduce mid-term maintenance costs as we would be able to use any of a number of Microsoft Dynamics software development partners to service our site instead of being locked into using Tyler for all maintenance. “If you’re not proactive with contracts, you’re begging to only get few to no bids,” Eric Lupher said. “Why aren’t they sending an RFP (request for proposal) to Microsoft and Oracle?”

In the mid-term, the State’s enterprise procurement office should look to other cloud ERPs like Oracle NetSuite and SAP S/4HANA Cloud. We should also be more willing to build our own applications by directly hiring software developers and support staff to deploy technology for our government like the United States Digital Service (USDS) launched by President Obama in 2014. We could also prioritize Michigan-based software companies in the bidding process to help build our high-tech economy and spend more of our taxpayer money here.

3. Collaborate with other governments to build and maintain open source software.

In 2023, Switzerland passed the Federal Law on the Use of Electronic Means for the Fulfillment of Government Tasks (EMBAG), which requires their public sector to make all their software open source. This legislation was inspired by the “public money public code” movement. Open source software built in this way in America could be shared by thousands of local and state governments and be improved upon by tens of thousands of developers worldwide.

When governments take more control over their software development with initiatives like USDS, we retain public ownership over our technology, which gives us the freedom to do things like open source our software. This also means that many different governments can share the costs of ongoing software development and maintenance amongst themselves. So instead of corporations like Tyler Technologies profiting from thousands of governments using the same platform, the governments themselves should share those savings.

4. Ensure all future State enterprise procurement bidding processes are open and proactive.

Too often, the public only hears about these contracts long after the bidding process, long after millions of dollars in payments are made, only after a deal becomes controversial. Our State’s enterprise procurement office needs to be open and loud about the contracts they’re looking to fill. There are 585,000 software and IT services companies in the United States. Why are we only getting one qualified bid for a critically important campaign finance system? A key reason is that these contracts are hard to find and get qualified, which is why Tyler with its large government relations focus can close so many of these deals.

Our State procurement team also shouldn’t wait for bids to come to us. We should actively cast a wide net for large government contracts to bring more bidders into the process and get more competitive pricing. You wouldn’t sell your house or car just by listing it on one obscure website for a few months. Our government should be even more proactive when seeking bids for multi-million-dollar projects. A truly open bidding process for all government contracts would save Michigan millions of dollars each year and provide more access to small businesses to access this work.

Bottom Line:

To be clear, the buck stops with the Secretary of State. “Even if Michigan’s procurement office leads the contracting process, that does not absolve the Department of State from having the ultimate responsibility” over making all financial disclosure reports public, agrees Eric Lupher. He points out that Article 4, Section 10, Clause 5 of the Michigan Constitution requires, "The department of state shall make the report available to the public online." So if campaign finance records like annual financial disclosure reports are not available online in the past, present, or future, that’s the Secretary of State’s responsibility.

Michigan’s taxpayers, journalists, and politicians deserve better from our campaign finance system and other government services that have been contracted and subcontracted out to companies who are not directly accountable to the people. The plan above outlines a path out of this mess for MiTN and a strategy for fixing these problems for good. By enforcing the terms of our existing contracts to recover millions of dollars from government contractors and using those savings to transition to cheaper and more effective technology, we can save the State money now and later and gain freedom from corporations who lock us into long contracts. It’s long past time for Michigan to fire this two-faced middleman and take more control over our government contracts and bidding processes.