State Governments Turn to AI to Do the Grunt Work

This week in the Prompt Economy, the spotlight is on how AI is reshaping local and federal government. One of the most dramatic examples surfaced this week in the U.S. heartland.

When the COVID-19 pandemic hit, the Kansas Department of Labor was running on 1970s technology. Calls to its customer service center jumped from 15,000 to 1.5 million per day almost overnight, and the system nearly collapsed. The state spent the next two years rebuilding from scratch. That story is now playing out across the country as states move agentic AI out of the experimental phase and into the services citizens use every day.

The details of the Kansas turnaround are striking. A Route Fifty article reports that the state replaced a labor system that had barely changed in five decades with a cloud-native, AI-enabled platform built in 29 months. The old system was available only 65% of the time. Calls took 30 to 40 minutes to resolve. Training a new employee took eight weeks.

The new system is a different world. It runs 24 hours a day with no downtime, and about 90% of people seeking help can now be served online. Training time has dropped to two weeks. With call transcription and auto-adjudication now handled by machines, workers focus on the cases that require human judgment.

The people behind the project say the payoff goes beyond speed. Kansas Secretary of Labor Amber Shultz told Route Fifty the state built for decades, not just for today. Alec Chalmers, AWS’ director of educational and government technology, told the publication that AI will allow governments to modernize legacy applications that are in some cases 30 and 40 years old. Shultz was direct about the cost of waiting: “We’re really failing individual citizens, businesses, our stakeholder groups, organized labor. It’s not just one person; we’re failing everybody.”

Governance First, Agents Second

Kansas shows what a rebuild looks like. Tennessee shows how to prepare for one. A StateTech Magazine article profiles Tennessee CTO Jerry Jones, who built governance and workforce structures before deploying any AI tools. The state created an AI advisory council in statute, along with a review committee that requires agencies to justify business value, funding and data readiness before launching pilots. Jones told the publication: “Everybody has a great idea for AI. You have to have a way to filter that.”

With those guardrails in place, the pilots are now underway. They span legal, citizen services, IT operations and back-office workflows. One uses AI to retrieve and redact information for public records requests, work that previously required significant manual effort from attorneys and IT staff. Another is a statewide chatbot that helps residents navigate benefits eligibility.

Jones stressed starting where the risk is low. “Start in the back office. If it goes sideways, nobody’s going to die.” The article’s central argument is that the shift to agentic AI is a transformation in how government operates, not just how it processes data. Jones put it plainly: “We’re moving from systems of record to systems that act. Agentic is coming. But you’ve got to build the foundation first.”

AI Enters the Courtroom, the Pharmacy and the Permit Office

While Kansas and Tennessee rebuild at the state level, other governments are putting AI to work in the field. A Government Technology article reports on state and local deployments across Michigan, Utah, California, and Nevada. In Allegan County, Michigan, public defender Chad Catalino deployed JusticeText to search and transcribe body cam footage. Case clearance is up 8 to 9% after a year, and seven statewide systems now use the tool, including Montana, Iowa and Kentucky.

The use cases keep multiplying. Utah became the first state to allow AI-driven prescription renewals, with physician sign-off required on the first 250 interactions. In Lancaster, California, Mayor Rex Parris deployed an AI permitting tool that reviews draft applications against 18,000 pages of updated building code. “Governments shouldn’t be adding to the cost of things,” Parris said. “They should be making them cheaper, more affordable, and AI really helps us do that.”

The reach extends to language itself. North Las Vegas became the first jurisdiction in Nevada to offer real-time AI translation at public meetings in virtually any language. Forty percent of the city’s population speaks a language other than English. For residents who had no voice in city hall before, the article says, it is access.

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