If you read the 'fine print' this inititive is aimed at mandatory consideration of Open Source software in the procurement process, which is a good thing, not mandatory adoption which would be a bad thing. Software is a tool, and users (including government) should be able to choose the right tool for the job.
All too often in a political procurement process the salesmen (lobbyists) will have the upper hand against the freely available due to the simple fact that politicans are not technologists, and have no real idea how or even if Open Source works. So even if it's use could save millions, it's frequently ignored. Mandating it's consideration would at least level the playing field somewhat, and hopefully save a few taxpayer dollars along the way.
New York City Examines Law Mandating Open Source [Slashdot]
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