State and local governments are accelerating their use of artificial intelligence (AI) to improve public service delivery, but for many residents, that pace feels too fast. While public sector leaders are rightly focused on efficiency, cost savings and user experience, there’s growing concern that public trust and resident comfort are not keeping pace with the technology.

This isn’t just a challenge of implementation; it’s a matter of public confidence. And that confidence, according to new data, is more fragile than government leaders might expect.

AI implementation is gaining ground — fast

In recent years, government agencies have made meaningful progress in modernizing resident services. Many basic digital government services are now mainstream, offered by most agencies and embraced by the majority of residents. But in the face of mounting pressures to do more with less, state and local leaders are looking to AI to further accelerate modernization. 

Artificial intelligence and machine learning rank second on NASCIO’s 2025 State CIO Priority list, behind only cybersecurity. In a survey of state and local government leaders this year, PayIt, the leader in digital customer experience solutions for state and local governments, found nearly 60% of agencies were already using AI in some capacity, whether to automate internal processes, support customer service interactions, or power resident-facing tools like chatbots. Interestingly, only 2% of respondents reported they have no plans to deploy AI. 

There’s no question: AI in government is here — and with it comes real potential to improve operations and elevate digital experiences. But it also introduces new public scrutiny, at a time when resident trust is already at historic lows.

Residents aren’t as ready as agencies may think

Despite the momentum, only half of residents say they are comfortable with governments using AI to deliver services — a drop from 56% just a year ago. Notably, net comfort fell among Gen Z and Gen X, but remained generally flat among Millennials and Boomers.

This discomfort doesn’t necessarily stem from an outright ignorance or resistance. Most residents are AI-aware, though less than half report using AI regularly (1-2 times a month). But when it comes to government services, concerns about security, fairness, accuracy and transparency take center stage.

When asked about potential harms, 87% of residents expressed concern about government AI making decisions based on inaccurate data, 86% about privacy loss and 82% about bias. Nearly 8 in 10 respondents said they believe agencies should be required to disclose when AI is being used in a service.

This sentiment aligns with broader trends. A 2025 PEW study found that more than half of Americans feel AI hurts more than it helps when it comes to protecting personal privacy. Only 17% believe AI will have a net positive impact on society in the next 20 years.

What does all this mean for governments eager to modernize?

First, they must treat transparency as a priority, not a footnote. Clear, early communication about how AI is used (and what safeguards are in place) can reduce public skepticism. The good news is that resident comfort levels went up when asked about specific AI applications. This suggests agencies should also highlight uses and their benefits, such as reduced wait times or faster issue resolution.

Second, overall digital maturity must remain a focus. While AI offers transformational promise, many residents still struggle with foundational digital interactions. Adding high-tech tools before addressing ease of use, accessibility and convenience could backfire — amplifying frustrations instead of solving them.

Finally, agencies should embrace an incremental, resident-first approach. Starting small, piloting AI programs with measurable outcomes and inviting resident feedback at every stage helps build the track record needed to earn trust.

Let’s not skip steps in the race toward smarter government

It’s tempting to think of AI as a finish line for digital government, but it’s important not to lose sight of the bigger modernization picture. 

While residents largely report that online government experiences today are mostly on par with private-sector transactions, actual expectations remain modest. Just around half of consumers anticipate features like transaction histories, payment reminders, or quick checkouts — features now commonplace in the private sector.

Exploring AI’s possibilities can deliver real value, but investing in foundational features and services to improve usability, accessibility and overall experience shouldn’t be ignored. By focusing on transparency, usability and trust, governments can ensure that modernization delivers for everyone.