Where last year’s federal Department of Government Efficiency (DOGE) activities implemented disruptive cuts to budget and personnel designed to shrink the size of government, states and localities are generally taking a different approach. Cost savings are important, but state and local officials are recasting efficiency as a broader transformation agenda focused on getting more value from government spending and delivering levels of service, effectiveness and accountability that boost resident satisfaction and trust.
The summit brought together more than 40 executive leaders, agency managers and technology officials from state and local government for a daylong efficiency discussion. Attendees from red and blue states described their initiatives as measured efforts to use data, technology and bureaucratic reforms to reduce the cost of government while improving the performance of public services.
Here are some themes that emerged:
USING DATA TO GUIDE SPENDING
Jurisdictions are increasing their use of data to inform budget decisions, shifting away from incremental adjustments to legacy spending and toward evidence-based approaches.
Rather than defaulting to historical allocations, agencies are asked to justify funding requests through standard documents that outline program goals, expected outcomes and supporting evidence. Some states are also building internal analytical capacity — such as dedicated data science support — to help departments evaluate program effectiveness and quantify impact.
The North Carolina Office of State Budget and Management, for example, works with departments to develop evidence-based budget requests and offers practical training on creating relevant supporting data.
Efforts like these let governments assess which programs are delivering results and to shift resources accordingly. As fiscal pressures intensify, this approach helps states make the most of scarce budget dollars and build a culture of data-driven decision-making across agencies. With new funding harder to come by, governments are trying to reallocate existing dollars based on evidence of impact.
“We know we won’t have new money to work with,” said one state official. “The only way we can spend is by moving money around.”
LINKING EFFICIENCY, EFFECTIVENESS AND USER EXPERIENCE
State and local leaders still care about cost control, but they’re also framing efficiency in terms of outcomes — like delivering better services, using data to make smarter decisions and building systems that can sustain improvement over time.
For example, Utah’s Government Reform, Innovation and Transparency (GRIT) initiative, launched by Gov. Spencer Cox in May 2025, tracks customer experience improvements and project completions along with cost savings and cost avoidance.
“You can’t be so efficient that people have a bad service experience,” said one state executive.
Officials in California are taking a similar approach — redesigning services from a user perspective and trying to increase the state’s capacity to deliver what residents want. Gov. Gavin Newsom’s 2025 executive order on government efficiency, known as the California Breakthrough Project, launched an Innovation Fellows Program that trains teams of state employees in techniques like human-centered design and puts them to work on projects that improve efficiency, service delivery and customer experience.
State and local officials at the summit said government performance and experience correlate directly to trust. “There’s a constant conversation in California about how to make taxpayers feel like the government is working for them,” said one state executive.
This perspective is prompting agencies to engage directly with users of government systems — both employees and the public — to understand what they like and dislike. It’s driving greater use of surveys, focus groups and other engagement methods that help agencies design services from a user’s perspective.
In addition, state and local officials are targeting outdated policies and procedures that drive up costs and limit effectiveness.
The Arizona Capacity and Efficiency Initiative, launched by Gov. Katie Hobbs in March 2026, aims to save as much as $100 million over three years in part by simplifying government operations and consolidating purchasing power. The Arizona initiative, like those in California and Utah, engages state workers in the process, asking employees to suggest ideas for saving money and removing bottlenecks.
These initiatives acknowledge that modern technology is essential to boost efficiency and performance. Under Arizona’s initiative, for example, the state is partnering with academic institutions to create innovation hubs that will help it use AI and other tools more effectively.
THE GROWING IMPACT OF AI
State and local government leaders expect AI to play a central role in improving user experience and expanding government’s capacity to meet residents’ needs.
One emerging vision is the use of generative AI to create unified digital experiences across fragmented government systems. Rather than navigating multiple agency websites, residents could interact with a single, intelligent interface that draws on information from across departments. In this model, AI acts as an “experience layer,” allowing governments to deliver more cohesive services while using existing systems and data as the underlying foundation.
Over time, this approach could significantly reshape how governments deliver services. Traditional websites may give way to intelligent interfaces capable of providing information, guiding users and even completing transactions across agencies. Instead of creating websites, agencies would maintain accurate and accessible databases to support these interactions.
Governments are exploring other ways AI can simplify processes and boost capacity, too.
AI-powered services could check the completeness of complicated planning and permitting applications before they are submitted, potentially reducing delays for housing construction and other projects. AI could also help agencies analyze and synthesize large volumes of public comments collected during regulatory processes.
But significant barriers remain.
Procurement is one key challenge. Many jurisdictions are working with AI vendors on free or low-cost pilot projects to test and develop use cases. The goal is to expand successful pilots into mainstream use through a formal contracting process. But there are questions about whether pilot vendors would be excluded from follow-on contracts under unfair advantage clauses.
Integration is another constraint. While intelligent AI agents could potentially perform complete services such as renewing vehicle registrations or applying for permits, those tasks will require deep connections with back-end systems and databases.
*The Center for Digital Government is a division of e.Republic, Government Technology's parent company.
