So now the government has all my data and looks at it constantly to avoid it being available to private companies? Sounds like the worst situation possible.

All your data? No, just records of whether or not your a citizen/resident. That seems like pretty important data for any government to have. It's also information the state's records department likely already has. For example, if you have a drivers license with the state or you were born in the state they'll have that documentation.

Unless you are just an anarchist, then I can't see how it's unreasonable for a government to know who it represents. That's why governments do censuses. Heck, that's needed just for the basic function of making sure you aren't voting in multiple districts.