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Priorities Podcast
Faced with budget constraints, federal pressure, states turn to modernization
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Faced with budget constraints and diminished supp…
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- [00:02]
A
Welcome to State Scoop's Priorities podcast. I'm Keely Quindlen, a reporter with State Scoop. This week I interviewed Melissa Maynard, a project director at the Pew Charitable Trust, to discuss a recent report she authored about how states are turning to modernization and efficiency efforts in the face of tightening budgets. Her report illustrates how most states, which have faced tighter finances and rising public expectations over the last few years, especially under the second presidency of Donald Trump and his administration's waning support for state activities, are allowing this fiscal pressure to accelerate government and innovation. But before we jump into that conversation, here's what's happening in state and local government technology news this week. New Jersey Governor Mikey Sherrill on Monday named Kevin Damer, the state's education commissioner, as her administration's chief technology officer. Damer replaced Christopher Ryan, who stepped down last week. Sheryl has also announced the state will stand up a new web form to collect information from residents about potential infractions by federal immigration authorities. New York Mayor Zoran Mamdani last week announced that he'll get rid of an AI powered chatbot as part of his plan to close the city's $12 billion budget gap. The chatbot, which received strong backing under former Mayor Eric Adams, had been found at times to provide incorrect or even illegal advice. A former product manager at the Colorado Digital Service recently announced a new website called the Colorado Digital Services Navigator. He said no assets were taken from his old job to create the website. State officials said that they are planning, though, to launch a similar portal later this year. The employee, Brian Curtis, said he just wanted to give a birthday present to the state, which turns 150 years old on August 1st. While each state faces its own unique challenges to budgeting, there are a number of common threads among them. Our guest this week, Melissa Maynard, a project director with the Pew Charitable Trust, explains, while each state is tackling budgeting issues differently, many states are finding new uses for data and technology and redesigning their processes to retool government work. We start, however, with taking a look at the big picture. Why are states budgets tightening in the first place?
- [02:22]
B
States budgets are tightening for a number of reasons. We look at this as part of our our series that we take on every year about the fiscal pressure five key fiscal issues that states are facing in the year ahead. So in this series this year we look we focused a lot on the federal government and the intersections with with state budgets and how states are reckoning with issues like Medicaid, Snake, Snap, which are not just putting new fiscal pressure on states, but also Asking them to take on new administrative roles as well.
- [02:57]
A
Yeah. And some of this is forcing states also to, like, rethink the mentality of doing more with less. Right. Which is, I feel like a cyclical occurrence across states. Budgets, you know, wane and then widen. But why is this moment fundamentally different than previous moments of budget shrink?
- [03:17]
B
I think a number of different factors are converging at the same time. A lot of it does have to do with the federal pressures. You've got new roles related to disaster management. You've got Medicaid, you've got snap. You've got all of this uncertainty coming together. At the same time, the pressures that states are facing are really not about, like, the normal cycle of the economy. It's really just a uncertainty in the economy coupled with kind of some uncertainty related to the federal state relationship. That's different as you. You're kind of referencing the impulse to kind of look under the hood of state government and fix what isn't working isn't new. When new governors take. Often take office, they often launch initiatives aimed at retooling state government to improve efficiency and better align operations with their priorities. And this is especially the case when budgets are tightening. So that's really kind of amplified the interest this year. State legislatures, too, have often played important oversight roles related to government efficiency now. But what's different now, and that is because of just the intensity of uncertainty, of new administrative pressures that states are facing, is the scope of the work that we're seeing in states and how quickly it's spreading.
- [04:39]
A
Yeah, absolutely. And, you know, you write that some of this budget shrink, this uncertainty. Right. That's coming from. It seems like every direction is actually accelerating innovation in states. So can you talk a little bit about why this fiscal pressure is inspiring innovation instead of. I don't know, I feel like my gut instinct would be, you know, like a turtle to, like, go back in my shell and just, you know, avoid it at all costs. But, you know, they're pivoting.
- [05:10]
B
I think you want to be able to do something, and in some cases, there aren't savings to be found that kind of equal the scale of the challenges that states are facing. But there is. There are just opportunities to make government better. And you want to, like, if you're. If you're in charge of running a state, you want to roll up your sleeves and be able to look comprehensively and do everything that is within your power. And states are doing that, they're tackling it in really interesting ways. Efficiency is just becoming. Becoming A very central focus for states as tightening budgets collide also with new advances in technology and especially AI. So that opportunity, that kind of collision of forces, it's really not just the tightening budget environment, but also new technologies are just creating new opportunities to tackle problems that are long standing. So you're really just seeing an incredible volume of efficiency efforts, especially when you're kind of looking at a broad definition of kind of efforts to improve how government works, where you have some legislative efforts, some executive efforts, and even in some cases multiple distinct initiatives unfolding at the same time.
- [06:23]
A
Yeah, yeah. And you know, a lot of states also too frame efficiency and the aim of efficiency. Right. In different ways. There's the cost savings approach. Right. Which we're seeing states drill down on with their own, like their own DOGE style bodies. Like in New Hampshire, there's koj and you know, there's so many different iterations of this. But then there's also the, the approach of, you know, improving resident services through digital service delivery. You know, what approach are you seeing stick a little bit longer? I know it's, you know, we're now past the year mark of the, you know, Trump 2 administration. So like, what are you seeing as kind of lingering?
- [07:10]
B
I mean, it's interesting because some of the initiatives that are clearly echoing DOGE are really still unfolding right now. Like the COGE New Hampshire example that you just referenced, that those findings just came out. And it'll be really interesting to see how much uptake that there is for those recommendations and a similar effort in Iowa in this legislative session. But I think what's really interesting to me is that like looking broadly, broadly beyond the initiatives that are clearly echoes of the federal DOGE to think about, like what's, what are states doing to rethink how they've done business for a long time and to really retool how they serve citizens. Some of the initiatives are entirely homegrown or kind of built on long standing reform efforts and kind of a culture of government reform. Utah is one example that that comes to mind for me in this vein there Government Reform Innovation and Transparency Initiative launched in, in May. And it, it isn't all new. Like it's, it's kind of pulling on some different threads that have been in place in Utah for a long time. But the governor kind of elevated it as an important statewide priority. They've been asking agencies to really carefully measure, you know, put, put forward efficiency projects that they want to tackle with the staff kind of as a central driver. They have emphasized from the, we are not wanting to cut jobs as part of this and we realize that we need the workers that we have to really play an elevated role in helping us figure out how to do this work better as the people who are best situated to figure out how to make improvements and where there are inefficiencies that we can kind of help address. So they've already, since May, saved 12,000 hours of staff time and $7.7 million while also making service enhancements that they, they estimated to be worth another $9.8 million worth of, of, of of improvements. So that those, those efforts weren't all new also, which is striking to me. So they've had in place for a long time efficient, like really in depth efficiency evaluations that the Office of the Legislative Fiscal Analyst kind of jointly conducts with the state budget office, but as a new kind of tool in the toolbox they're now sharing. If an agency or implements the recommendations from those efficiency and evaluations, they're actually allowing the agencies in some cases to redirect the savings toward like rewarding and retaining key staff. So, and we wouldn't say that one approach is sticking more than the others, but I think that like the ones that kind of build on and can pull on threads that have already kind of been there and bring them together, elevate them as a statewide priority, really strike me for kind of the speed of documented improvements they've been able to report so far. And I could imagine that an initiative like that having some staying power, some of it's in, in legislation and it builds on something that's kind of been in place culturally in Utah for, for a number of administrations.
- [10:29]
A
Yeah. And you know, to kind of zoom out a little bit, something you're, you know, drilling down on, it seems, is that efficiency really isn't new. Making things work better conceptually isn't a new conception. Like these are things that have of course been at the heart of public sector for, for, you know, as long as I feel like it's existed. But you know, you, you touched on a little while ago as well as, you know, the issue with, you know, workforce which just continues to rear its head. But of course the, the thing that is new with all of this is, is AI is the technology that enables us to, you know, find those inefficiencies a little bit more. But, and you know, in your article that most states though are still at the piloting phase or early adoption. So if this really is the thing that's going to help deliver efficiency, what's the holdup with states, why are they, why are they hesitating? Why don't they just go full force?
- [11:22]
B
I've been really impressed that states are trying to take a really thoughtful approach. I think what would concern me more is if they were just as I think the CEO of Code for America says in my piece, like if they were just grabbing this first tool that was available for them and just kind of running wild. States have had a lot of work to do just in kind of getting their, their data houses in order and making sure that the data that is feeding AI systems is as clean as possible. So I'm actually in some ways really take a lot of solace in how slowly and thoughtfully states are taking this work in a number of cases. I think it's very powerful. We've seen that in our research and our conversations with state officials. But I think we would have cause for concern if states were jumping into this a lot more quickly than they are. I think the pilot approach is, is a smart one here.
- [12:18]
A
Yeah, yeah. And you touch on in your reporting, you know, where there's a number of different ways that AI can deliver on this efficiency, this efficiency quota. But you know, in your experience like and gathering of information, where are you seeing AI deliver these returns? Is it in front end services, for example, or back office operations? Where are you seeing this puzzle piece fit into state government in this way?
- [12:53]
B
I would say that the AI pilot approach, and I actually wrote about this a little bit more in a piece that I worked on that's a little bit dated now, but I've been impressed and I'm sure you followed this much more closely than I have with the results from some of the early AI pilots that, you know, mirror how workplaces all over the country are experimenting with AI just kind of putting AI tools in the hands of a cross section of state employees and kind of experimenting with what might be possible. Colorado, as you probably know, has rolled out Gemini statewide now after a third of users in the pilot reported saving at least six hours each week thanks to help with tasks ranging from kind of research to spreadsheet analysis. So that kind of is similar to I think how a lot of Americans are experiencing kind of experimenting with AI right now. But Colorado also found some surprises that were striking to me. They found that Gemini was especially impactful for employees with disabilities or neurodivergence who said that AI was really helpful in transforming their workflows in ways that align with skills and the ways that their, their minds work. So we're still, we're clearly starting to see widespread of use of AI and governments to improve workflows for individuals and free up some time to work on higher level tasks. I think that's Pennsylvania is another example that comes to mind. They've had a chat GPT pilot that they've, they've scaled up quite quickly recently and they've kind of taken some learnings from those early experiments to deploy it more broadly in their across workforce with required training. For example, the pilot participants in Pennsylvania I think reported an average time savings of 95 minutes a day for administrative tasks. So I think the most common examples that are more mature are really of experimenting with a broad experimentation by making these tools available across a wide swath of agencies. What's interesting now are that instead of these issues kind of coming that way, AI is coming up more naturally as states are starting with a problem like here's a problem that we're trying to solve and is AI part of the solution? So it's kind of nice to see it coming from both directions now. You know, you have a problem, you want to try to solve it and AI is one of the tools that needs to be paired with other solutions that are more like people and, and process oriented as well. I was struck by the example in, in Arizona from my piece is an interesting example. The Department of Child Safety that's like the Child Protective Services Agency in Arizona is using AI like again with some of the, as with some of the early pilots that we saw to kind of free up staff capacity for other needs. But these are kind of frontline caseworkers who just do really emotionally taxing work, working with families. And they wanted to try to solve the really important problem of just making their jobs earlier easier, preventing backlogs and delays, which you know, has potentially very consequential impacts in the case of the really important work that they do. And they were able to through this AI tool project, just one component of it really to free up for caseworkers 17 minutes per reporting activity, which when you bundle it all together is 2,800 staff hours per year that they're saving for those caseworkers. So that's just one example that was really striking to me. Striking to me. It'll be interesting to see like as the kind of move from the broad scale like pilot experimentation stage to like really tackling pilots that are scalable across agencies.
- [17:00]
A
Yeah, it will be interesting. And I, and I want to go back to something you mentioned which is people and processes. Right. You emphasize in the, in the article that Technology isn't enough alone, but that people and processes matter just as much. But a lot of, like, what I hear through my reporting and conversations with folks across the public sector is that, you know, making the changes there can sometimes be harder than making the changes on the technology side. So what, you know, like, in your view, is the hardest change that states have to make in their people and processes to help deliver on these efficiency goals.
- [17:39]
B
I would say it's kind of. It's the combination. You can kind of think about the technology, you can think about the people, you can think about the processes, but there's culture change that, that needs to happen. And I think when it comes to AI, the, like, the relationship that people have with AI is something that everybody's needing to kind of figure out for themselves and figure out how they're like, where they stand. And like, Colorado is a really interesting example to me in that they kind of come at this call center doing this work through the governor's operational agenda. So they're looking at different problems and they're trying to tackle not just like the tech side of the problems, but the people and processes and everything together through the Colorado Digital Service and just a close working relationship with the governor's office. So they're looking at call center operations statewide, they're looking at improving digital services statewide, and they're looking at the state's footprint of leased and owned space. So there's definitely very analog reforms that they're taking on and also very digital reforms. They've like, kind of come at this in a number of different ways. And I think the example that I use in the piece of trying to improve unemployment insurance call centers kind of illustrates like, the, like, why it's important and also tricky to try to tackle the people problems alongside the tech problems and alongside the, like, the process problems. So they realized about a year ago that, like, callers were waiting 37 minutes just to like, get help with their unemployment insurance claims from the, the contact center. And they wanted to understand, like, why is. Why is that happening? What are, what's the cause of that problem? And they found that about half of the callers just wanted to understand, like, what is the status of their claim. So they came at that and some of the other problems, like, they. They realized that some of the callers were, were bilingual and that was causing kind of some problems in trying to, trying to resolve those. Those questions as well. So they tackled it in a very comprehensive way by introducing an AI powered virtual agent to kind of help with that basic here's the status of your claim information. But they also hired, they hired 18 bilingual agents to kind of help with, with Spanish language inquiries. And they added other online features to kind of help people find what they needed without calling. And all of those things together have really helped them reduce wait times. They're more than cut them in half as of October. So that example just kind of struck me because it's both very intuitive, like of course you need to figure out why people are calling, but they had to bring together like a mix of, of of hiring and tech solutions and process solutions to figure, figure things out. Pennsylvania, similarly, that was an interesting cultural example to me. They have been able to make a lot of progress in their, their, their permitting system by just through an intensive effort at culture change, but also through some interesting uses of AI and interesting kind of process improvement changes. And as a result, the Department of Environmental Protection cleared its backlog of permit applications for the first time in 15 years. So that's not just like keeping pace with new applications. You have to also clear older applications at the same time. And they did this like not just through tech innovation, although that was of course a part of it. They really had to rethink various processes and speed up hiring. You know, that they, they talked to me about kind of the having, having a money back guarantee for permit that, that took longer than their advertised timeline. Just kind of focused everyone's attention. And they also just worked through streamlining different, different hiring requirements so that they were able to improve hiring speeds, get them by 40%, get rid of vacancy rates that were also causing some permit and processing delays. And just everything together like filling vacancies, changing some processes was really able to, to move them forward in a way that I found kind of emblematic of the cultural change that really is an important piece of the puzzle.
- [22:02]
A
Yeah, absolutely. You know, we're talking about the internal people and processes changes, but you know, externally a lot of these efforts are also to increase and drive the, you know, rebuild of the public's trust in government. Right. And you note that in your story too. And I know several of the states have incorporated public trust back into their messaging. Right. Like you touched on Pennsylvania. I know Governor Shapiro has been, you know, one of the most vocal about this, but I guess I'm curious if you're seeing some of this materialize. Like, I guess my question is do voters notice these things or do they only notice things when they break? Right, like those long wait times and things like that?
- [22:44]
B
Yeah, I mean, I found this line of messaging and Thinking really to be pretty compelling. And it came up across the political spectrum. I mean people care. Removing friction from everyday annoyances like long hold times from interactions with government is a really interesting way to try to improve the overall relationship that state governments have with their residents. So I don't, I think that as you were saying, people notice when things are broken. But the, the challenge that states are addressing is like public trust is at record lows. That's a hard problem to try to rebuild from. But if you can kind of make interactions more positive, align with citizen expectations, I think there's, it can only, it can only improve the relationship that citizens have. I think the focus on collecting data about how citizens are experiencing government is really an interesting line of inquiry as well that some states are going down. Washington State and Utah are striking in that way. They're really trying to gather as much information from citizens about what they're experiencing and just ask them. I think asking citizens is a really an interesting way to, to try to explore that relationship and attempt to build trust as well. In Utah, they have QR codes everywhere and there are widgets on government website and they ask every user to rate both. Their compassion is one of the things they're asked to rate reliability. They're asked to rate their experience at a really striking way which is being asked after every government inaction. What is the compassion that you experience in interacting with state agencies to process a service or a transaction? That was really striking to me.
- [24:42]
A
That is really striking. I don't know if I've ever heard of a government checking in to see if they have come across in a compassionate way, which is kind of shocking that that's so novel and it's kind of sad on the other, on the other hand. But I want to pivot towards, you know, the future. If we checked back in, in like two to three years on this topic, what would you say? Success. And how would you define success for states that are and have been highlighted in this article that are doing this work? What would you, you know, what would you be pointing to as like, yep, they did it, this is it?
- [25:19]
B
I would say just broader implementation. They're learning from really interesting examples right now. But if, if trust numbers start to start to tick up and they're able to kind of learn from these early pilots and to deploy them broadly to really change, change the, the alignment of kind of what citizens expect from the way that they interact with, with services kind of out in the world. Somebody mentioned that like if basically in a world in which people are used to being able to track like where exactly where their pizza is. They want to be able to know like where their permit is in the process as well. And that like shift in citizens expectations is going to continue to be challenging for states because it's, it's moving fast. It's changing just the service turnaround times in the private sector are changing, look by the, by the minute thanks to these emerging technologies. But if, if governments are able to kind of continue to experiment in innovative ways in ways that reduce friction and, and kind of deploy those solutions broadly across all of the complex work that they do in state government, I think that that would would be quite successful in my mind.
- [26:31]
A
Gotcha. And then lastly, what's one takeaway that you hope policymakers or the public that reads this will remember from this report
- [26:44]
B
that these problems are not, are not new. I mean, it's really striking to me. I've been looking at government performance and efficiency efforts for a long time from a lot of different perspectives, and these are not new problems. What I would say is new is just they're, they're kind of unsticking some problems that suits have been wanting to, wanting to make improvements on for a long time and accelerating them.
- [27:14]
A
That was Melissa Maynard with a Pew Charitable Trust. We are sending our many thanks to her and her organization for their participation in that conversation. You can subscribe to the Priorities podcast@monities podcast.com and wherever you get your podcasts while you're there, be sure to leave a review or a rating on the podcast page. That small extra step helps more people like you find the show. This podcast is a production of Scoop News Group in Washington, D.C. adam Butler and Carlin Fisher helped put it together. And until next week, I'm Keely Quinlan. Thanks for listening.