36 Governors Can Use AI to Transform State & Local Government
The AI debate is contentious and growing hotter with every passing day, but there is one area that should be fertile for common ground. Many of us have strong opinions on AI models, data centers, and the use of AI in schools. Those issues should be debated thoroughly in Washington, state capitals, and local communities. But state and local leaders are missing a golden opportunity to transform government functions in ways that can improve responsiveness and service quality while reducing costs to taxpayers, small business owners, and families.
Housing prices continue to push homeownership out of reach for young families. The median existing-home price hit an all-time high of $440,600, and government regulation alone now accounts for $131,734, or 26.4 percent, of the price of the average new single-family home— but developers report that regulatory delays average seven months during lot development alone.
The situation is even worse for small businesses, especially those attempting to bring manufacturing jobs back to America. Creating those jobs requires facilities, roads, sewers, and most of all energy. Each of those steps requires innumerable permits, often with different timelines from different local, state, or even federal agencies. Permitting a new transmission line usually takes longer than a governor’s entire four-year term.
Every process from permits to procurement to grants could be faster, cheaper, and more accountable. AI can make it happen and the 36 governors to be elected in 2026 should be telling the voters today how they will do it. They do not need to change their platform one bit, instead they should think ahead about how AI can help them deliver on their promises to voters.
Recent estimates put the amount of fraud at between $233 billion and $521 billion every year, with much of that exposure concentrated in the large federal benefit programs that states administer. If you are running with a promise to do something about it, start working now to determine which AI tools will allow state agencies to 10x the number of investigations.
If you want to make the non-fraudulent portion of your state budget work better, use AI to run grant programs with fewer staff and shorter timelines so that more money actually goes to helping people and less goes to overhead. And if you are worried that your plans, no matter what they are, will falter at the implementation stage at the hands of a bureaucracy that is apathetic at best about your ideas, use AI to monitor progress and hold agencies accountable.
AI can also allow state and local leaders to rethink fundamental assumptions about how their agencies function. Why are grant applications, human-submitted data reports, and annual reports even needed in the first place? AI can simply find that information on its own or with the help of AI agents within regulated organizations.
So how can new state and local leaders make these ideas a reality starting on Inauguration Day? First, change permitting and other processes to give others a chance to deliver better service. Many red and blue states already let you visit private businesses instead of a dreaded trip to the DMV for vehicle registrations and inspections. Why not also let private businesses find the most efficient and effective ways to collect data or verify adherence to regulations or building codes? Florida and other states are experimenting with just this type of model. Other states should follow suit.
Second, challenge agency leaders to come up with the best solutions to transform functions that have been unchanged for decades. Offer them incentives such as a governor’s fund for the AI-driven proposals that can produce the most significant service improvement, mandates to eliminate burdens placed on the public, and recognition for those who deliver.
Finally, rework budget proposals to delete functions that do not need to exist anymore. Put more staff time into helping people rather than making them comply with arbitrary mandates. And ensure a greater percentage of funds are helping people live better and more fulfilling lives, rather than feeding the permanent bureaucracy.
None of this requires taking sides in the AI wars and none of it requires waiting on Washington. It demands a governor willing to ask why red tape adds seven months to putting a shovel in the ground, why a grant program needs dozens of staff to move money that has already been appropriated, and why a family has to prove something the state already knows. Those questions were always fair. What is new is that the answers are finally within reach. The candidates who start asking them now will spend their first term delivering for people instead of working within the limits set for them.
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