Hobbs launches initiative to eliminate $100 million in spending by using technology and AI

Gov. Katie Hobbs is launching a new initiative aimed at cutting waste — and she thinks it could eliminate $100 million in spending over the next three years. She announced the effort in her State of the State address earlier this year.

The initiative — dubbed the Arizona Capacity and Efficiency Initiative, or ACE — will use technology and AI to streamline processes. It will not cut jobs or shut down departments.

So, is it Arizona’s version of DOGE, President Donald Trump’s Department of Government Efficiency once headed up by Elon Musk? The Show took that question to ACE’s newly announced director, Amy Edwards Holmes.

Full conversation

AMY EDWARDS HOLMES: This is very different. I would not say it's the Arizona DOGE at all. I think we do share the goal of creating more efficiencies, but this initiative, the Arizona Capacity and Efficiency Initiative, is very different. We're focused on building the capacity of our state, of our workforce, and the technology that we use to deliver better service. And we're not cutting jobs or programs or anything like that.

We're just trying to operate more efficiently to save resources, looking at our administrative side of how we deliver services and trying to do that more as one state, instead of cutting and doing kind of the more drastic things that they did at the federal level. So this, I would say, is nothing like that. And we're really focused on building capacity, building and strengthening what we do across the state and modernizing it.

Arizona Governor's Office

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GILGER: OK, so this is about technology, redundant contracts, redundant processes, like integrating AI is part of this, right?

EDWARDS HOLMES: Definitely, yeah. We're analyzing the spend across the state. What are we buying? How are we buying it? How can we do that better? So we're trying to reduce our IT spend overall by 3% to 5% by looking at our contract renewals, doing the things that all of us should be doing in government, and we're trying to look at the data and use that to help inform all the decisions that we're making across the state.

We're also looking at what we're paying for different services or contracts or supports and trying to make sure we're getting the best value for the taxpayer. And so we're looking at that. That's our goal.

GILGER: Yeah. OK. So you're doing this without cutting jobs. I want to talk about how that is. Like, what if a job is redundant? What if it can be done using AI, which we hear so much about today? You know, people won't be necessary for all of these things anymore. What will you do with those positions?

EDWARDS HOLMES: In my experience, I've been working on government efficiency, how technology can improve the operations of government for over 25 years, and federal, state and local levels. And my experience is that government's a little bit different from the private sector, where you might be seeing more of those concerns.

But we're looking at automating some of the things that we do, and humans are always going to be in the loop. Technology and AI can complement our work, but it's not going to take over our work. I think we have to look at this very carefully and keep our residents in our communities top of mind and how we apply these technologies. And so we're doing that, but at this time, we don't see those kinds of impacts that you might see in the private sector.

GILGER: You talked about starting out by inviting state employees to sort of say, how do you think we can cost save? Which I think makes sense in a way, because I know there's griping about this in every workplace, right? Like, oh, we don't need that or this is a waste of time or a waste of money, that kind of thing. What have you heard from folks? Has that process started?

EDWARDS HOLMES: That's exactly where we're starting. I think we want a top down, bottom up, open door. What are the best ideas to how we can improve the operations of the state? And while, of course, leadership can have great ideas and drive a lot of that, but in my experience, some of the best ideas actually come up from across the whole workforce in the front line. So yes, we're collecting those ideas from our workforce. And I look forward to seeing them and putting them to work.

GILGER: Yeah. The governor has said that this could save the state up to $100 million. How do you come up with a number like that? Like, what are your goals here? You want to go even higher? Are you thinking that's pretty lofty?

EDWARDS HOLMES: It's a good goal that the governor has set, and I think we're working to achieve it. Of course, we have analyzed a lot of our existing spend and based that estimate of savings on those initial reviews that we've done. But a lot of that savings is coming from IT software, consolidations, buying as one state, looking at our procurement practices, looking at our IT spend, looking at maybe there's some vacant properties or other kind of assets that we own that we don't need. And so we're looking at how we can hit that target of $100 million.

GILGER: It's also coming at a moment where here in Arizona, and I think around the country and federally as well, we're hearing lots of talk of waste, fraud and abuse, right? This kind of catchphrase when it comes to criticizing the size of government.

And we're hearing that from Republicans here in the state Legislature who have laid out their own kind of accountability package of bills aiming at cracking down on this kind of fraud and abuse, particularly at AHCCCS, Arizona's Medicaid program, which has seen a massive, you know, scandal over the last couple of years dealing with big amounts of fraud and kind of bad actors abusing the program.

Is your initiative also looking at that? I know the governor's executive budget also will include many new positions to try to work on analyzing that data.

EDWARDS HOLMES: Yeah, I think analyzing existing data, looking at those trends, and utilizing that to help across all the operations, and, of course, especially to ensure that we don't have instances of fraud is something that could be part of this.

GILGER: I know that you have done a lot of this in your career, as you mentioned. You were, you know, at Johns Hopkins, you've worked with lots of state governments. Do they all kind of encounter the same issues? Do you see the same kinds of problems crop up everywhere where you're saying, this is an easy way to fix some of these issues? This is an easy way to fix some of these issues that people just don't think about.

EDWARDS HOLMES: Yeah, so that's one of the things. Previously, I was a senior official at the U.S. Treasury Department, where I was in charge of a lot of our data and all of the fraud analytics that goes with that. And that's definitely something that I've seen a lot of, which is how do you collect data to know where you're going, put in the proper protocols and safeguards to ensure that fraud can't enter the system, that people can't change bank account information and they have identifiers. All the checks are in place to ensure that a transaction is proper and meets all of the requirements.

And so at the Treasury Department, we had a do not pay system that analyzed data before we made payments and all kinds of analytics driven tools to help fight fraud and abuse. So I think like in my experience, using the data and building it into your process on how you execute and spend can be a great way to prevent that fraud and deliver the results. That's really what I see a lot of states doing, a lot of governments at all levels, using that data to help them do that.

GILGER: Yeah, makes sense. Let me ask you lastly, Amy, about the timeline here. Like the Governor Hobbs is up for reelection in November, just what's that eight, seven, eight months from now. I'm sure you're hoping hoping she is reelected and you can continue this work, but how much do you think you can get done in that time?

EDWARDS HOLMES: I think we can do a lot. We are currently working. We're building our agency plans. This is important work that needs to be done. How we save resources to stretch every tax dollar as far as we can is important, and also creating that capacity in innovation and technology and the way we use data in the state is something that's, we're supporting a long legacy of continual improvement in Arizona, and we're trying to grow that. And so those are things that we can achieve over the next year, and we're working to do that and spark this work to continue for many years moving forward.