Yes, I do pay for Sublime Text (one of the few exceptions I make and it does bother me).
I think the government should still pay for software but with the stipulation that it can only be public domain.
Governments can pay for textbooks but with the stipulation that they have to be public domain.
So contractors will bid for the work. They will do the work. Good contractors will get further work. Everyone will be able to build on the prior work done.
How do you propose that the authors of Sublime Text make a living?
Road projects are funded by the government at some level - taxes and municipal bonds. I'm not sure how that would work for software which has a potentially worldwide audience.
There's also the "what gets built" is determined by the government. So, office products get funded - but not games (unless you're fortunate enough to get a government grant https://store.steampowered.com/news/app/2162800/view/3729584... ).
And do you want to run a government funded operating system and web browser?
I don't see a model where this works... unless you're thinking of toll roads as micro transactions and advertiser supported billboards while playing games.