Cities Facing Fiscal Crisis Could Benefit from AI Solutions, Assuming Authorization Granted
In recent years, major U.S. cities like San Francisco, New York, Boston, and others have made substantial investments in artificial intelligence (AI), driven by robust tech ecosystems and a strong venture capital presence. These investments have not only contributed to economic growth but have also positively impacted municipal budgets through enhanced business activity and job creation, leading to increased tax revenues.
The potential benefits of AI are far-reaching, extending beyond economic growth. AI can improve student learning, enhance public safety, and boost government efficiency. In education, AI has the potential to play a transformative role, providing individualized tutoring that research shows improves student performance. However, it is crucial to ensure that AI-enhanced technology aids educators, as the National Education Association, the nation's largest teachers' union, stated last year.
Cities are also leveraging AI to optimize emergency response systems. Tampa Bay, for instance, is evolving its emergency response systems to incorporate AI, optimizing the response times of fire departments and prioritizing the most important cases for dispatchers. Similarly, in Los Angeles County, a predictive AI model has been piloted to identify residents most at risk of homelessness, ensuring that workers and resources are directed effectively, with 86 percent of the pilot's clients retaining their homes.
The building-permitting process has also seen significant improvements with AI. In Honolulu, new AI systems have lowered its backlog by 70 percent and reduced wait times by a third. Cities like Denver are also upgrading their development review systems, partially automating key tasks, and saving 50 percent in time, helping the city handle a surge of applications for accessory dwelling units.
Washington, D.C., is implementing AI into the visual inspection of critical infrastructure like water mains and sewage pipes, allowing the district to find leaks earlier and save on maintenance costs. This proactive approach to infrastructure maintenance is becoming increasingly important as cities face financial challenges, with many running deficits and new municipal debt issuance reaching a record $513 billion in 2024.
However, the implementation of AI in cities also raises concerns about job displacement. The Bureau of Labor Statistics estimates that there are roughly 15 million local government workers, the most in history. Automation in government services could displace millions of them. To address this, city leaders must ensure that new AI systems get implemented in ways that deliver the operational gains essential to healthier budgets and better services.
Moreover, city and county governments across the United States are conducting comprehensive reviews of their local labor markets to identify tasks most vulnerable to automation. For instance, legislation has been introduced in Washington State that would give public-sector unions veto power over AI adoption. Meanwhile, unions like AFSCME, the nation's largest municipal workers' union, are advocating for a meaningful, decision-making role in the use of AI in the workplace through collective bargaining at every stage of the process.
The No Robo Bosses Act, introduced by California State Senator Jerry McNerney, warns of potential unjust impacts on workers' livelihoods and working conditions. As cities navigate the coming AI transformation, a clear picture of a city's financial future is necessary to make informed decisions about AI adoption. Studies by McKinsey, Deloitte, MIT, and others have found that a wide range of skills can be automated using existing AI technologies. Cities must be strategic in their approach to AI adoption to ensure they reap its benefits while minimizing negative impacts.
In conclusion, the integration of AI in U.S. cities offers significant potential for economic growth, improved services, and enhanced efficiency. However, it is crucial for city leaders to approach AI adoption thoughtfully, considering the potential impacts on jobs, workers, and the overall financial health of the city. By conducting comprehensive reviews of their local labor markets and engaging with workers and unions in the AI adoption process, cities can ensure they reap the benefits of AI while mitigating potential negative impacts.
