“Going Back to Cali” for AI Governance Lessons as States Take the Lead on AI Implementation
Imagine you are a state-level technology leader. Recent advancements in artificial intelligence promise to make approving small business licenses faster, or improve K-12 student learning, or even standardize compliance between agencies. All of which promise to improve the experience of your state’s constituents. Eager to deploy this new technology responsibly, you look to peers in other states for guidance. Their answers vary wildly, and in the absence of federal guidance, it quickly becomes clear that there is no standardized playbook. You must chart the path forward on your own, with far more limited resources.
This scenario is becoming increasingly common as AI systems are moving rapidly into consumer-facing services. Without federal action on AI, state government leaders are increasingly shouldering the responsibility for both protecting consumers from potential algorithmic harms and also supporting responsible innovation to improve service delivery to their constituents. States have structural advantages that position them to experiment with regulatory approaches: shorter legislative cycles that allow for quicker course corrections, authority to pilot programs, and the use of sunset provisions that make it easier to revise or retire early-stage governance models. This often places states as the most agile regulators who can swiftly set up guardrails for rapidly evolving AI technologies that impact their residents.
But this regulatory agility must be matched with the necessary government capacity in order to be a success. The current lack of federal action is forcing states not only to pass new AI laws, but also to take on huge implementation challenges, without the AI expertise typically found in federal agencies or major private employers. Building this capacity within state governments will demand resources and technical expertise that most states are only just starting to chart . Without deliberate investment in transparency and talent, even the most well-crafted legislation might not achieve their intended goals. As State legislative cycles start back up for the 2026 year, state policymakers should move forward with proposals that increase transparency, accountability, and bring new technical experts directly into government to meet the scale of need in the current moment.
Increased Transparency to Build Public Trust
One of the most immediate ways that state legislatures can move forward with transparency-improving legislation is with the passage and successful implementation of use-case inventories. A use-case inventory is a public-facing publication of algorithmic tools and their specific uses. They disclose when and where state governments are utilizing algorithmic tools in consumer-facing transactions such as applications for social programs and public assistance benefits. They are typically conducted by governments as a mechanism for transparency and to facilitate third-party auditing of outcomes.
The benefits of public-facing AI use-case inventories are far reaching: they increase government transparency into automated decision-making outcomes, can provide valuable insights to private-sector product vendors, facilitate third-party auditing and bias-testing, and can even increase interagency sharing of best practices when AI tools are effectively used. They are particularly important in high-risk decisions such as those related to government benefits and services. Alternatively, a lack of transparency in expensive acquisitions from private and third party vendors can mean that an agency or entity is unaware of what tools they have acquired and whether or not they are safe to deploy in consumer-facing settings without bias or other inaccuracies.
When increasing numbers of Americans are growing skeptical of the practical uses of AI tools, it is doubly important to design public systems that encourage transparency when algorithmic tools are deployed in the public and private sectors alike.
Despite a lack of federal legislation regulating responsible AI usage, one area where the federal government has led is in the production of regular AI use-case inventories since 2021. First requested via Executive Order 13960 in 2020 during the first Trump administration, and implemented in the Summer of 2021, the federal government provides a relatively transparent accounting of where AI is adopted within the federal enterprise. This policy has had bipartisan appeal, and the Biden administration continued the production of regularly updated inventories for the public. The Trump administration with its recently updated inventory now has the opportunity to use this tool to deliver increased public trust in AI, a clear administration priority.
Case Study: Implementation Challenges in California
While the federal experience demonstrates that AI use-case inventories can work, it also reveals an important limitation: transparency mechanisms rely on technical talent and focused implementation to be successful. California offers a cautionary example. In 2023, the state legislature passed Assembly Bill 302 requesting the State Department of Technology to “conduct a comprehensive inventory of all high-risk automated decision systems [ADS] being used by state agencies and submit a report to the Legislature by January 1, 2025, and annually thereafter.” Importantly, the bill covered systems that are “used to assist or replace human discretionary decisionmaking.” The bill was envisioned as a critical first step in gaining insight into the ways AI was being deployed in consumer-facing interactions by state government agencies. It was also in reaction to public reporting of biased technology being used on those applying for public services and benefits.
However, the initial implementation deadline for the bill passed in early 2025 and the only report provided to the public was a single document stating that there are “no high-risk ADS [tools] being used by State agencies”—a fact that is easily disputed by a simple Google search. For example, the state healthcare exchange uses automated document processing tools to gauge eligibility for affordable health insurance policies, the state unemployment insurance program uses an algorithmic tool developed by a private company to rate applicants on the likelihood of their application being fraudulent, and the state Department of Finance even plans to use generative AI tools as part of fiscal analysis and state budgeting work. These are significant decisions that can have real repercussions for California residents. Rather than creating a transparent use-case inventory that can tell Californians where AI is being used in consumer-facing interactions, we instead have a letter which incorrectly states —based on examples above—that there are no algorithmic tools being used. The table below has additional examples of publicly disclosed automated decision-making system use cases in California state government.
Results like this underscore the urgent need to embed technical talent within state governments to ensure that laws are implemented as designed. When implementing its use case inventories, the federal government provided guidance to reporting agencies and publicly released a final inventory for a majority of agencies. Even with substantial support during the federal government’s collection process, there were still notable implementation challenges faced when creating a federal use-case inventory. Most notably, many agencies initially failed to disclose all use-cases, and a promised template for agencies to use has yet to come to fruition. The State of California, by contrast, instead relied on an ad hoc process, polling state agency officials through two successive emails to conduct its inventory evaluation.
Scaling Government Talent to Bridge the Technical Capacity Gap
California’s experience implementing a use-case inventory is, unfortunately, not unique. Across the country, well-intentioned legislation is often passed into law only to falter during implementation. Once enacted, agency staff are tasked with operationalizing complex policies, often without the necessary technical expertise, staffing capacity, or financial resources to succeed. Without deliberate investment in these areas, the responsibility of properly regulating emerging technologies and protecting consumers from harm is shifted to government employees that are poorly equipped to handle the growing scope and technical complexity of their workloads. That is why, in addition to transparency, states need to find ways to quickly bring in technical talent and expertise in digital technologies to drive forward effective implementation of the coming onslaught of bills.
In the midst of massive layoffs within the federal government and private sector, individual states now have access to historic levels of human capital and can bring forward some of the innovations developed within the federal government in recent years. Methods like skills-based hiring to rapidly bring in technical talent and scale new teams within government have also been developed and thoroughly tested in recent years through entities like the United States Digital Service (USDS) and the Consumer Financial Protection Bureau’s in-house technologists. These initiatives brought skilled workers into government at less than half the recruiting cost of private sector hiring and saved hundreds of millions of dollars through reimbursable agreements with agencies in lieu of costly private sector consultancy contracts.
During periods of financial uncertainty it can be deeply challenging for state leaders to make the investments necessary to hire additional staff and build robust government teams. One other method to bridge the gap between policymakers and those who implement it is through the development of modernized policy fellowships that utilize endowments or other private funds to bring cutting-edge researchers and experts directly into government. California has most recently unveiled a revamped science and technology fellowship that will place additional AI experts within state agencies or the legislature to propel forward-thinking and informed policymaking.
Conclusion
With no federal framework in place, state governments will be the primary drivers of accountability and transparency needed to ensure AI serves the public rather than erodes democratic norms. This presents us with a crucial window for state policymakers to establish both processes that further transparency and robust talent pipelines that can manage responsible deployment in order to restore public trust and prevent harms before AI systems become further entrenched in critical public services. States that build transparent AI use-case inventories and invest in technical expertise will be best positioned to translate lofty regulatory principles into real protections for their citizens—while also fostering a fairer, more trustworthy environment for innovation to thrive.
To scale up climate solutions, local governments need to accelerate system changes
When I ran for city council in Boulder, Colorado in 2023, everyone talked about climate change. Forum after forum, all ten candidates spoke up for the climate.
And cities saying climate change matters is typical. The number of US cities with adopted climate action plans is in the hundreds.
That’s what we need, since cities drive the bulk of greenhouse gas emissions and are on the front lines of climate havoc.
More specifically, for large-scale climate solutions to work, cities have to really stretch. That’s according to the Intergovernmental Panel on Climate Change (IPCC), which says cities need to rapidly become compact, efficient, electrified, and nature‑rich urban ecosystems where we take better care of each other and avoid locking in more sprawl and fossil‑fuel dependence.
Yet, big-picture progress in the United States is critically insufficient. Those are the words of Climate Action Tracker, an independent scientific analysis evaluating climate commitments. The US has pledged to reduce 2030 GHG emissions levels by 50–52% below 2005, yet the latest projections show we are on track to achieve at best only 29–39%—assuming no further backsliding.
And earlier this month, the Trump administration withdrew our federal government from the international climate agreement process.
So when local governments say “we’re on it,” what is a concerned citizen to think?
What local government climate solutions look like
Climate advocates are used to talking about climate action. But for local governments, the measuring stick for climate progress isn’t simply action. What counts is measurable progress towards specific, substantive transitions.
Transitions to walkable, compact neighborhoods where abundant, space-efficient middle housing near jobs and services let most residents meet daily needs within a short walk or bike ride, reducing trip lengths and housing and transport costs.
To transit-rich, highly bikeable towns where frequent, accessible service and a connected, protected network allow seniors and youth travel independently and where per-capita car dependence falls.
To fully-electrified communities in which homes and transportation run on clean, distributed power, working efficiently, that delivers lower bills, healthier indoor air, and outage resilience, with benefits accruing equitably to residents.
To enhanced landscapes of bioswales, permeable streets, restored wetlands, and drought- and fire-resilient shade trees that cool neighborhoods, absorb stormwater, and buffer heat, flood, and smoke risks.
To resilient local food systems that blend urban agriculture with regional producers, food hubs, cold storage, and compost-to-soil loops to deliver reliable, affordable, nutritious food even during heat, drought, or supply disruptions.
There is good news: The transitions we need, and the solutions and capacity we need to implement them, are showing new signs of life. That’s evident in two trends.
One trend is local governments playing a bigger role in climate solutions. The number of U.S. cities reporting to the CDP, a global system for disclosing climate progress, has grown to over 150. Now more than 200 US cities have committed to 100 percent clean electricity. And cities’ climate action plans are showing a visible shift from a focus on municipal operations to community‑wide impacts of buildings, transportation, and waste, and more sophisticated thinking about resilience.
As the federal government has retreated, advocates are increasingly realizing cities and counties have tools to lead. Local governments manage streets, land use, buildings, public fleets, transit, and major service contracts. They can strongly influence state-level actors, like energy utilities and air quality programs, and be providers of those services directly.
There is proof of this awakening in the large numbers of people suddenly running for local office on climate. Political organizing coalitions such as Run on Climate and Climate Cabinet helped elect more than 50 local leaders running on climate in 2025. One of the year’s most high-profile candidates, Zohran Mamdani, won with “fast and free” buses–one of the measures IPCC has highlighted as a meaningful mitigation measure that saves more money than it costs–as a centerpiece of his campaign.
The other trend is a greater focus on wellbeing. Research included in the latest IPCC report shows demand-side measures can cut end-use emissions by roughly 40 to 70 percent by 2050 while improving daily life and making communities stronger. And wellbeing is the currency of local governments and local politics. Concrete quality of life issues dominate local elections and policymaking, which is where climate action takes root—or doesn’t.
Climate action prompted by a desire for healthier, happier, and less expensive lives is happening. People are adopting electric cars, e-bikes, heat pumps, and induction stoves because they work better, are cheaper to operate, and healthier. The intersection of climate solutions and wellbeing is central to a 2025 bestseller Abundance and to the national conversation it kicked off about defining and achieving “abundance.” The topic of wellbeing was a bright spot at the COP30 climate talks via the World Health Organization’s report, “Delivering the Belém Health Action Plan.”
These two trends reinforce each other. Local governments oversee the services where wellbeing, decarbonization, and resilience meet. When those services are designed as a system, investments can compound to create more value for more people, who then have a stake in continuing the transition. And the importance of rallying around local governments to carry climate solutions forward is becoming clearer as U.S. national policy looks structurally less reliable than most experts used to think.
Difficult conditions for change
But local governments face headwinds. Existing policies and markets, like those that have created widespread car dependence and extensive natural gas systems, create momentum that favors the status quo and encourages continued investments that lock us in further. Simply put, it’s easiest to keep doing it the way we’ve done it before, and then we dig ourselves in deeper.
Local governments purposefully design systems to keep things stable. Most likely, whatever your town or county is doing is based on the direction of long-term plans, from departmental plans to bigger comprehensive plans. Those plans often come up for renewal only every few years or longer, and if you miss that window or fail to follow procedures, making big change is nearly impossible. Related, local governments tend to have policies and practices for conducting community engagement that deliberately create a high bar for making major turns.
On top of all that, local governments in the U.S. are suffering a long-term decline in investment that leaves them with significant and growing cash flow constraints, heavy workloads, limited time to deliberate, and pressure to deliver. The pandemic and recent national political forces reduce their maneuverability even more.
Political will necessary but not sufficient—concrete transitions are needed
In order to drive climate transitions under such tough conditions, political will is necessary but it is not sufficient. For local governments to scale up climate solutions, they need to take tangible, visible steps to change systems, consistent with evidence-based recommendations, outlined by institutions like the IPCC.
Here is what that can look like – and what advocates can look to encourage:
1. Transition plans
Climate issues touch everything, so all local governments can point to doing climate things. But the difference between lists of activities and high-reward strategic commitments that make good use of time is everything. The latter requires a clear plan to make transitions happen, with defined outcomes and milestones, and dogged pursuit.
Ambitious climate action at the local government level means being clear about the transition(s) the community is focused on, which could include the previously mentioned examples, along with what successful completions looks like and by when. This involves working on at least two tracks concurrently—both integrating ambitious transformations into long-term planning exercises, for which adopting changes may or may not be available right away, and taking whatever more tactical action is possible now to support such planning and concrete action to the fullest extent possible.
- Transition plans might consider: What needs to be different? Who are the elected officials and partners needed to make the transition work? What barriers could inhibit progress, and what is the strategy for overcoming them? What are the key inflection points in behavior adoption, and what is the change model to reach them?
2. User experience
Cities often add a bike lane in one place or restore a bus line in another. What truly changes behavior is a complete experience that makes the pro-climate option the intuitive choice. Kids can bike around town without parents fearing they could be hit by a driver. You can count on bringing a large electric bike anywhere and park it safely. Buses are within a 10-minute walk of home and arrive every 10 minutes. Utility investments in electrification actually lower monthly bills. To make climate transitions attractive and sticky, we have to confront gaps that get in the way of people’s experience from their vantage point.
A practical opportunity for local governments is to use the tools of user experience (“UX”) and be responsible for how the ecosystem works and feels from the immersive standpoint of users. UX is an interdisciplinary field that uses research, psychology, and design to remove friction and ensure a seamless journey for users.
- Some questions for managing the user experience: Who is/are the transition(s) for—who are the “users” involved that will experience change? What do they need to do and stick with to make the transition work? What performance measures are needed to constitute progress, and how do we get elected officials and executives to care about them? Where are there persistent, hard-to-reach gaps that can be spotlighted as “known issues” for partners and other jurisdictions to see and possibly be helpful with? What are the gaps between our intent and reality, and how can we overcome them?
3. Public service delivery
One of the core jobs of local government is to provide public services like zoning, safe transportation, building standards, air quality protections, and emergency management. Providing services is also generally the justification for spending public money. And services are where the planning activities that local governments tend to be so careful about materialize in the real world. So if local governments are going to be engines of climate action, then day-to-day service delivery—their core product—is where most of that action will show up. Climate action will appear in what gets approved, funded, built, maintained, enforced, measured, and improved.
Local governments already deliver public services. So the opportunity is to evaluate how core local government services can or should be tuned and/or reorganized to drive climate and resilience outcomes. This includes formal adoption in comprehensive plans, capital improvement programs, and strategic plans, and clear alignment with budget priorities. When leaders routinely report on progress and adjust course publicly, it signals that climate transitions are a core organizational responsibility rather than a side project.
- An evaluation of services might consider: How is climate action aligned with where money is actually spent? What changes in standards, contracts, and operations are needed to lock in better outcomes? How can the thinking and tools of service development improve user experiences?
4. High-level ownership
Plans only come to life when people who have the right level of power and accountability own delivery. Inside local government, that means both the elected body (mayor, city council, and/or their equivalents) and executives (city manager, their deputies, and in the case of a “strong mayor” form of government, the mayor) adopt the initiative as their own. Roles and accountability are defined and gaps are addressed. Resources are allocated through direct investments and through partnerships that expand capacity.
High-level ownership of climate solutions in local government happens when transitions are included in the agency’s highest-level plans and strategies.This includes formal adoption in comprehensive plans, capital improvement programs, and strategic plans, and clear alignment with budget priorities. It also looks like leaders routinely communicating to the public about the transitions under way, the progress against them, and how community members can help support the journey.
- Some ways to gauge high level ownership: Do staffing, partnerships, procurement, budgets, and intergovernmental advocacy support transition intent? Is change management happening as needed, with a clear vision and ongoing communication expressed to the public? Is the work of transitions integrated into core functions and the day-to-day responsibilities of staff necessary for success? How are electeds supporting and leading?
5. Playbook of procedures
Local government commitments are heavily shaped and constrained by procedure, like protocols for what gets a hearing and when, annual or biennial work plans, and comprehensive plans that may come around only every few years or longer. Communications between elected officials and staff may be limited by city ordinance, and communications among elected officials may be very limited by state law. There are also often arcane, highly-localized meeting customs. Getting things done requires working through these procedures and often landing decisions in small windows that are easy to miss.
A playbook for how climate transitions are going to make their way into staff proposals, planning processes,and budgeting is fundamental to turning a good idea into something real. Such a playbook is needed to spell out who does what, when, and through which formal channels, so that key decisions do not depend on heroic one-off efforts. It also helps new staff and elected officials quickly understand how to use existing procedures to advance climate goals, rather than be derailed by them.
- Some questions to ask: What are the relevant scheduled planning processes and upcoming meetings, and who is required to fully elevate the work there and how? What learning systems or listening structures exist, and how are they being used to surface discrepancies and continuously drive improvement?
Conclusion
To scale up climate solutions through local government, we need at least two things. First, political will, which is familiar to most advocates. Looking into 2026 and beyond, climate advocates have great opportunities to continue increasing the proportions of elected local bodies who are led by politicians serious about climate solutions. Everyone has a role to play: run for local office, support local climate candidates, use whatever powers of creativity and persuasion you have–from writing to speaking to organizing and beyond–to help make climate action a core election issue in your community.
The second—and where we need greater shared focus—is to make local governments responsible for specific, strategic commitments to systems change. To do that, help build transition plans that commit to providing great user experiences, an approach to public service delivery that is aligned with those objectives, ownership by city council and the city manager or mayor, and a clear playbook for how strategic climate commitments are going to be adopted and rolled out.
Not everything is going right for the climate movement. But there are some fantastic bright spots, and one of those is big new local government innovations that are starting to unfold.
Looking into 2026, I’m excited to be a part of the movement to help local governments drive the next generation of climate progress. And a big hat tip to FAS with its regulatory rethink and government capacity work as well as ICLEI USA, both partnering with local officials like me to map out how cities can translate ambitious climate goals into durable systems change.
There are great things ahead, and so much room to work together.
A Grant Program to Enhance State and Local Government AI Capacity and Address Emerging Threats
States and localities are eager to leverage artificial intelligence (AI) to optimize service delivery and infrastructure management, but they face significant resource gaps. Without sufficient personnel and capital, these jurisdictions cannot properly identify and mitigate the risks associated with AI adoption, including cyber threats, surging power demands, and data privacy issues. Congress should establish a new grant program, coordinated by the Cybersecurity and Infrastructure Security Agency (CISA), to assist state and local governments in addressing these challenges. Such funding will allow the federal government to instill best security and operating practices nationwide, while identifying effective strategies from the grassroots that can inform federal rulemaking. Ultimately, federal, state, and local capacity are interrelated; federal investments in state and local government will help the entire country harness AI’s potential and reduce the risk of catastrophic events such as a large, AI-powered cyberattack.
Challenge and Opportunity
In 2025, 45 state legislatures have introduced more than 550 bills focused on the regulation of artificial intelligence, covering everything from procurement guidelines to acceptable AI uses in K-12 education to liability standards for AI misuse and error. Major cities have followed suit with sweeping guidance of their own, identifying specific AI risks related to bias and hallucination and directives to reduce their impact on government functions. The influx of regulatory action reflects burgeoning enthusiasm about AI’s ability to streamline public services and increase government efficiency.
Yet two key roadblocks stand in the way: inconsistent rules and uneven capacity. AI regulations vary widely across jurisdictions — sometimes offering contradictory guidance — and public agencies often lack the staff and skills needed to implement them. In a 2024 survey, six in ten public sector professionals cited the AI skills gap as their biggest obstacle in implementing AI tools. This reflects a broader IT staffing crisis, with over 450,000 unfilled cybersecurity roles nationwide, which is particularly acute in the public sector given lower salaries and smaller budgets.
These roadblocks at the state and local level pose a major risk to the entire country. In the cyber space, ransomware attacks on state and local targets have demonstrated that hackers can exploit small vulnerabilities in legacy systems to gain broad access and cause major disruption, extending far beyond their initial targets. The same threat trajectory is conceivable with AI. States and cities, lacking the necessary workforce and adhering to a patchwork of different regulations, will find themselves unable to safely adopt AI tools and mount a uniform response in an AI-related crisis.
In 2021, Congress established the State and Local Cybersecurity Grant Program (SLCGP) at CISA, which focused on resourcing states, localities, and tribal territories to better respond to cyber threats. States have received almost $1 billion in funding to implement CISA’s security best practices like multifactor authentication and establish cybersecurity planning committees, which effectively coordinate strategic planning and cyber governance among state, municipal, and private sector information technology leaders.
Federal investment in state and local AI capacity-building can help standardize the existing, disparate guidance and bridge resource gaps, just as it has in the cybersecurity space. AI coordination is less mature today than the cybersecurity space was when the SLCGP was established in 2021. The updated Federal Information Security Modernization Act, which enabled the Department of Homeland Security to set information security standards across government, had been in effect for seven years by 2021, and some of its best practices had already trickled down to states and localities.
Thus, the need for clear AI state capacity, guardrails, and information-sharing across all levels of government is even greater. A small federal investment now can unlock large returns by enabling safe, effective AI adoption and avoiding costly failures. Local governments are eager to deploy AI but lack the resources to do so securely. Modest funding can align fragmented rules, train high-impact personnel, and surface replicable models—lowering the cost of responsible AI use nationwide. Each successful pilot creates a multiplier effect, accelerating progress while reducing risk.
Plan of Action
Recommendation 1. Congress should authorize a three-year pilot grant program focused on state and local AI capacity-building.
SLCGP’s authorization expires on August 31, 2025, which provides two unique pathways for a pilot grant program. The Homeland Security Committees in the House and Senate could amend and renew the existing SLCGP provision to make room for an AI-focused pilot. Alternatively, Congress could pass a new authorization, which would likely set the stage for a sustained grant program, upon successful completion of the pilot. A separate authorization would also allow Congress to consider other federal agencies as program facilitators or co-facilitators, in case they want to cover AI integrations that do not directly touch critical infrastructure, which is CISA’s primary focus.
Alternatively, the House Energy and Commerce and Senate Commerce, Science, and Transportation Committees could authorize a program coordinated by the National Institute of Standards and Technology, which produced the AI Risk Management Framework and has strong expertise in a range of vulnerabilities embedded within AI models. Congress might also consider mandating an interagency advisory committee to oversee the program, including, for example, experts from the Department of Energy to provide technical assistance and guidance on projects related to energy infrastructure.
In either case, the authorization should be coupled with a starting appropriation of $55 million over three years, which would fund ten statewide pilot projects totaling up to $5 million plus administrative costs. The structure of the program will broadly parallel SLCGP’s goals. First, it would align state and local AI approaches with existing federal guidance, such as the NIST AI Risk Management Framework and the Trump Administration’s OMB guidance on the regulation and procurement of artificial intelligence applications. Second, the program would establish better coordination between local and state authorities on AI rules. A new authorization for AI, however, allows Congress and the agency tasked with managing the program the opportunity to improve upon SLCGP’s existing provisions. This new program should permit states to coordinate their AI activities through existing leadership structures rather than setting up a new planning committee. The legislative language should also prioritize skills training and allocate a portion of grant funding to be spent on recruiting and retaining AI professionals within state and local government who can oversee projects.
Recommendation 2. Pilot projects should be implementation-focused and rooted in one of three significant risks: cybersecurity, energy usage, or data privacy.
Similar to SLCGP, this pilot grant program should be focused on implementation. The target product for a grant is a functional local or state AI application that has undergone risk mitigation, rather than a report that identifies issues in the abstract. For example, under this program, a state would receive federal funding to integrate AI into the maintenance of its cities’ wastewater treatment plants without compromising cybersecurity. Funding would support AI skills training for the relevant municipal employees and scaling of certain cybersecurity best practices like data encryption that minimize the project’s risk. States will submit reports to the federal government at each phase of their project: first documenting the risks they identified, then explaining their prioritization of risks to mitigate, then walking through their specific mitigation actions, and later, retrospectively reporting on the outcomes of those mitigations after the project has gone into operational use.
This approach would maximize the pilot’s return on investment. States will be able to complete high-impact AI projects without taking on the associated security costs. The frameworks generated from the project can be reused many times over for later projects, as can the staff who are hired or trained with federal support.
Given the inconsistency of priorities surfaced in state and local AI directives, the federal government should set the agenda of risks to focus on. The clearest set of risks for the pilot are cybersecurity, energy usage, and data privacy, all of which are highlighted in NIST’s Risk Management Framework.
- Cybersecurity. Cybersecurity projects should focus on detecting AI-assisted social engineering tactics, used to gain access into secure systems, and adversarial attacks like “poisoning” or “jailbreaking”, which manipulate AI models to produce undesirable outputs. Consider emergency response systems: the transition to IP-based, interconnected 911 systems increases the cyberattack surface, making it easier for an attack targeting one response center to spread across other jurisdictions. A municipality could seek funding to trial an AI dispatcher with necessary guardrails. As part of their project, they could ensure they have the appropriate cyber hygiene protocols in place to prevent cyberattacks from rendering the dispatcher useless or exploiting vulnerabilities in the dispatcher to gain access to underlying 911 systems that multiple localities rely on.
- Energy Usage. Energy usage projects should calculate power needs associated with AI development and implementation and the additional energy resources available to prevent outages. Much of the country faces a heightened risk of power outages due to antiquated grids, under-resourced providers, and a dearth of new electricity generation. AI integrations and supportive infrastructure that require significant power will place a heavy burden on states and potentially impact the operation of other critical infrastructure. A sample project might examine the energy demands of a new data center, powering an AI integration into traffic monitoring, and determine where that data center can best be constructed to accommodate available grid capacity.
- Data Privacy. Finally, data privacy projects should focus on bringing AI systems into compliance with existing data laws like the Health Insurance Portability and Accountability Act (HIPAA) and the Children’s Online Privacy Protection Act (COPPA) for AI interventions in healthcare and education, respectively. Because the U.S. lacks a comprehensive data privacy law, states might also experiment with additional best practices, such as training models to detect and reject prompts that contain personally identifiable information. A sample project in this domain might integrate a chatbot into the state Medicaid system to more efficiently triage patients and identify the steps the state can take to prevent the chatbot from handling PII in a manner that does not comply with HIPAA.
If successful, the pilot could expand to address additional risks or support broader, multi-risk, multi-state interventions.
Recommendation 3. The pilot program must include opportunities for grantees to share their ideas with other states and localities.
Arguably the most important facet of this new AI program will be forums where grantees share their learnings. Administrative costs for this program should go toward funding a twice-yearly (bi-annual) in-person forum, where grantees can publicly share updates on their projects. An in-person forum would also provide states with the space to coordinate further projects on the margins. CISA is particularly well positioned to host a forum like this given its track record of convening critical infrastructure operators. Grantees should be required to publish guidance, tools, and templates in a public, digital repository. Ideally, states that did not secure grants can adopt successful strategies from their peers and save taxpayers the cost of duplicate planning work.
Conclusion
Congress should establish a new grant program to assist state and local governments in addressing AI risks, including cybersecurity, energy usage, and data privacy. Such federal investments will give structure to the dynamic yet disparate national AI regulatory conversation. The grant program, which will cost $55 million to pilot over three years, will yield a high return on investment for both the ten grantee states and the peers that learn from its findings. By making these investments now, Congress can keep states moving fast toward AI without opening the door to critical, costly vulnerabilities.
This memo was written by an AI Safety Policy Entrepreneurship Fellow over the course of a six-month, part-time program that supports individuals in advancing their policy ideas into practice. You can read more policy memos and learn about Policy Entrepreneurship Fellows here.
No, Congress could leverage SLCGP’s existing authorization to focus on projects that look at the intersection of AI and cybersecurity. They could offer an amendment to the next Homeland Security Appropriations package that directs modest SLCGP funding (e.g. $10-20 million) to AI projects. Alternatively, Congress could insert language on AI into SLCGP’s reauthorization, which is due on August 31, 2025.
Although leveraging the existing authorization would be easier, Congress would be better served by authorizing a new program, which can focus on multiple priorities including energy usage and data privacy. To stay agile, the language in the statute could allow CISA to direct funds toward new emerging risks, as they are identified by NIST and other agencies. Finally, a specific authorization would pave the way for an expansion of this program assuming the initial 10 state pilot goes well.
This pilot is right-sized for efficiency, impact, and cost savings. A program to bring all 50 states into compliance with certain AI risk mitigation guidelines would cost hundreds of millions, which is not feasible in the current budgetary environment. States are starting from very different baselines, especially with their energy infrastructure, which makes it difficult to bring them all to a single end-point. Moreover, because AI is evolving so rapidly, guidance is likely to age poorly. The energy needs of AI might change before states finish their plan to build data centers. Similarly, federal data privacy laws might go in place that undercut or contradict the best practices established by this program.
This pilot will allow 10 states and/or localities to quickly deploy AI implementations that produce real value: for example, quicker emergency response times and savings on infrastructure maintenance. CISA can learn from the grantees’ experiences to iterate on federal guidance. They might identify a stumbling block on one project and refine their guidance to prevent 49 other states from encountering the same obstacle. If grantees effectively share their learnings, they can cut massive amounts of time off other states’ planning processes and help the federal government build guidance that is more rooted in the realities of AI deployment.
No. If done correctly, this pilot will cut red tape and allow the entire country to harness AI’s positive potential. States and localities are developing AI regulations in a vacuum. Some of the laws proposed are contradictory or duplicative precisely because many state legislatures are not coordinating effectively with state and local government technical experts. When bills do pass, guidance is often poorly implemented because there is no overarching figure, beyond a state chief information officer, to bring departments and cities into compliance. In essence, 50 states are producing 50 sets of regulations because there is scant federal guidance and few mechanisms for them to learn from other states and coordinate within their state on best practices.
This program aims to cut down on bureaucratic redundancy by leveraging states’ existing cyber planning bodies to take a comprehensive approach to AI. By convening the appropriate stakeholders from the public sector, private sector, and academia to work on a funded AI project, states will develop more efficient coordination processes and identify regulations that stand in the way of effective technological implementation. States and localities across the country will build their guidelines based on successful grantee projects, absorbing best practices and casting aside inefficient rules. It is impossible to mount a coordinated response to significant challenges like AI-enabled cyberattacks without some centralized government planning, but this pilot is designed to foster efficient and effective coordination across federal, state, and local governments.
Policy Experiment Stations to Accelerate State and Local Government Innovation
The federal government transfers approximately $1.1 trillion dollars every year to state and local governments. Yet most states and localities are not evaluating whether the programs deploying these funds are increasing community well-being. Similarly, achieving important national goals like increasing clean energy production and transmission often requires not only congressional but also state and local policy reform. Yet many states and localities are not implementing the evidence-based policy reforms necessary to achieve these goals.
State and local government innovation is a problem not only of politics but also of capacity. State and local governments generally lack the technical capacity to conduct rigorous evaluations of the efficacy of their programs, search for reliable evidence about programs evaluated in other contexts, and implement the evidence-based programs with the highest chances of improving outcomes in their jurisdictions. This lack of capacity severely constrains the ability of state and local governments to use federal funds effectively and to adopt more effective ways of delivering important public goods and services. To date, efforts to increase the use of evaluation evidence in federal agencies (including the passage of the Evidence Act) have not meaningfully supported the production and use of evidence by state and local governments.
Despite an emerging awareness of the importance of state and local government innovation capacity, there is a shortage of plausible strategies to build that capacity. In the words of journalist Ezra Klein, we spend “too much time and energy imagining the policies that a capable government could execute and not nearly enough time imagining how to make a government capable of executing them.”
Yet an emerging body of research is revealing that an effective strategy to build government innovation capacity is to partner government agencies with local universities on scientifically rigorous evaluations of the efficacy of their programs, curated syntheses of reliable evaluation evidence from other contexts, and implementation of evidence-based programs with the best chances of success. Leveraging these findings, along with recent evidence of the striking efficacy of the national network of university-based “Agriculture Experiment Stations” established by the Hatch Act of 1887, we propose a national network of university-based “Policy Experiment Stations” or policy innovation labs in each state, supported by continuing federal and state appropriations and tasked with accelerating state and local government innovation.
Challenge
Advocates of abundance have identified “failed public policy” as an increasingly significant barrier to economic growth and community flourishing. Of particular concern are state and local policies and programs, including those powered by federal funds, that do not effectively deliver critically important public goods and services like health, education, safety, clean air and water, and growth-oriented infrastructure.
Part of the challenge is that state and local governments lack capacity to conduct rigorous evaluations of the efficacy of their policies and programs. For example, the American Rescue Plan, the largest one-time federal investment in state and local governments in the last century, provided $350 billion in State and Local Fiscal Recovery Funds to state, territorial, local, and Tribal governments to accelerate post-pandemic economic recovery. Yet very few of those investments are being evaluated for efficacy. In a recent survey of state policymakers, 59% of those surveyed cited “lack of time for rigorous evaluations” as a key obstacle to innovation. State and local governments also typically lack the time, resources, and technical capacity to canvass evaluation evidence from other settings and assess whether a program proven to improve outcomes elsewhere might also improve outcomes locally. Finally, state and local governments often don’t adopt more effective programs even when they have rigorous evidence that these programs are more effective than the status quo, because implementing new programs disrupts existing workflows.
If state and local policymakers don’t know what works and what doesn’t, and/or aren’t able to overcome even relatively minor implementation challenges when they do know what works, they won’t be able to spend federal dollars more effectively, or more generally to deliver critical public goods and services.
Opportunity
A growing body of research on government innovation is documenting factors that reliably increase the likelihood that governments will implement evidence-based policy reform. First, government decision makers are more likely to adopt evidence-based policy reforms when they are grounded in local evidence and/or recommended by local researchers. Boston-based researchers sharing a Boston-based study showing that relaxing density restrictions reduces rents and house prices will do less to convince San Francisco decision makers than either a San Francisco-based study, or San Francisco-based researchers endorsing the evidence from Boston. Proximity matters for government innovation.
Second, government decision makers are more likely to adopt evidence-based policy reforms when they are engaged as partners in the research projects that produce the evidence of efficacy, helping to define the set of feasible policy alternatives and design new policy interventions. Research partnerships matter for government innovation.
Third, evidence-based policies are significantly more likely to be adopted when the policy innovation is part of an existing implementation infrastructure, or when agencies receive dedicated implementation support. This means that moving beyond incremental policy reforms will require that state and local governments receive more technical support in overcoming implementation challenges. Implementation matters for government innovation.
We know that the implementation of evidence-based policy reform produces returns for communities that have been estimated to be on the order of 17:1. Our partners in government have voiced their direct experience of these returns. In Puerto Rico, for example, decision makers in the Department of Education have attributed the success of evidence-based efforts to help students learn to the “constant communication and effective collaboration” with researchers who possessed a “strong understanding of the culture and social behavior of the government and people of Puerto Rico.” Carrie S. Cihak, the evidence and impact officer for King County, Washington, likewise observes,
“It is critical to understand whether the programs we’re implementing are actually making a difference in the communities we serve. Throughout my career in King County, I’ve worked with County teams and researchers on evaluations across multiple policy areas, including transportation access, housing stability, and climate change. Working in close partnership with researchers has guided our policymaking related to individual projects, identified the next set of questions for continual learning, and has enabled us to better apply existing knowledge from other contexts to our own. In this work, it is essential to have researchers who are committed to valuing local knowledge and experience–including that of the community and government staff–as a central part of their research, and who are committed to supporting us in getting better outcomes for our communities.”
The emerging body of evidence on the determinants of government innovation can help us define a plan of action that galvanizes the state and local government innovation necessary to accelerate regional economic growth and community flourishing.
Plan of Action
An evidence-based plan to increase state and local government innovation needs to facilitate and sustain durable partnerships between state and local governments and neighboring universities to produce scientifically rigorous policy evaluations, adapt evaluation evidence from other contexts, and develop effective implementation strategies. Over a century ago, the Hatch Act of 1887 created a remarkably effective and durable R&D infrastructure aimed at agricultural innovation, establishing university-based Agricultural Experiment Stations (AES) in each state tasked with developing, testing, and translating innovations designed to increase agricultural productivity.
Locating university-based AES in every state ensured the production and implementation of locally-relevant evidence by researchers working in partnership with local stakeholders. Federal oversight of the state AES by an Office of Experiment Stations in the US Department of Agriculture ensured that work was conducted with scientific rigor and that local evidence was shared across sites. Finally, providing stable annual federal appropriations for the AES, with required matching state appropriations, ensured the durability and financial sustainability of the R&D infrastructure. This infrastructure worked: agricultural productivity near the experiment stations increased by 6% after the stations were established.
Congress should develop new legislation to create and fund a network of state-based “Policy Experiment Stations.”
The 119th Congress that will convene on January 3, 2025 can adapt the core elements of the proven-effective network of state-based Agricultural Experiment Stations to accelerate state and local government innovation. Mimicking the structure of 7 USC 14, federal grants to states would support university-based “Policy Experiment Stations” or policy innovation labs in each state, tasked with partnering with state and local governments on (1) scientifically rigorous evaluations of the efficacy of state and local policies and programs; (2) translations of evaluation evidence from other settings; and (3) overcoming implementation challenges.
As in 7 USC 14, grants to support state policy innovation labs would be overseen by a federal office charged with ensuring that work was conducted with scientific rigor and that local evidence was shared across sites. We see two potential paths for this oversight function, paths that in turn would influence legislative strategy.
Pathway 1: This oversight function could be located in the Office of Evaluation Sciences (OES) in the General Services Administration (GSA). In this case, the congressional committees overseeing GSA, namely the House Committee on Oversight and Responsibility and the Senate Committee on Homeland Security and Governmental Affairs, would craft legislation providing for an appropriation to GSA to support a new OES grants program for university-based policy innovation labs in each state. The advantage of this structure is that OES is a highly respected locus of program and policy evaluation expertise.
Pathway 2: Oversight could instead be located in the Directorate of Technology, Innovation, and Partnerships in the National Science Foundation (NSF TIP). In this case, the House Committee on Science, Space, and Technology and the Senate Committee on Commerce, Science, and Transportation would craft legislation providing for a new grants program within NSF TIP to support university-based policy innovation labs in each state. The advantage of this structure is that NSF is a highly respected grant-making agency.
Either of these paths is feasible with bipartisan political will. Alternatively, there are unilateral steps that could be taken by the incoming administration to advance state and local government innovation. For example, the Office of Management and Budget (OMB) recently released updated Uniform Grants Guidance clarifying that federal grants may be used to support recipients’ evaluation costs, including “conducting evaluations, sharing evaluation results, and other personnel or materials costs related to the effective building and use of evidence and evaluation for program design, administration, or improvement.” The Uniform Grants Guidance also requires federal agencies to assess the performance of grant recipients, and further allows federal agencies to require that recipients use federal grant funds to conduct program evaluations. The incoming administration could further update the Uniform Grants Guidance to direct federal agencies to require that state and local government grant recipients set aside grant funds for impact evaluations of the efficacy of any programs supported by federal funds, and further clarify the allowability of subgrants to universities to support these impact evaluations.
Conclusion
Establishing a national network of university-based “Policy Experiment Stations” or policy innovation labs in each state, supported by continuing federal and state appropriations, is an evidence-based plan to facilitate abundance-oriented state and local government innovation. We already have impressive examples of what these policy labs might be able to accomplish. At MIT’s Abdul Latif Jameel Poverty Action Lab North America, the University of Chicago’s Crime Lab and Education Lab, the University of California’s California Policy Lab, and Harvard University’s The People Lab, to name just a few, leading researchers partner with state and local governments on scientifically rigorous evaluations of the efficacy of public policies and programs, the translation of evidence from other settings, and overcoming implementation challenges, leading in several cases to evidence-based policy reform. Yet effective as these initiatives are, they are largely supported by philanthropic funds, an infeasible strategy for national scaling.
In recent years we’ve made massive investments in communities through federal grants to state and local governments. We’ve also initiated ambitious efforts at growth-oriented regulatory reform which require not only federal but also state and local action. Now it’s time to invest in building state and local capacity to deploy federal investments effectively and to galvanize regional economic growth. Emerging research findings about the determinants of government innovation, and about the efficacy of the R&D infrastructure for agricultural innovation established over a century ago, give us an evidence-based roadmap for state and local government innovation.
This action-ready policy memo is part of Day One 2025 — our effort to bring forward bold policy ideas, grounded in science and evidence, that can tackle the country’s biggest challenges and bring us closer to the prosperous, equitable and safe future that we all hope for whoever takes office in 2025 and beyond.
PLEASE NOTE (February 2025): Since publication several government websites have been taken offline. We apologize for any broken links to once accessible public data.