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The AI Policy Gap: Why Local Governments Need Guardrails Before Tools
View the entire newsletter for more articles: 2025 – NJAC County Biz – July
by Himanshu Goil, CEO, TechForGov & Dana Zampella, Client Executive, Insight Public Sector – New Jersey
Artificial Intelligence (AI) is already reshaping how government works — from intelligent document processing to 24×7 resident-facing chatbots. But for many counties and municipalities, the adoption of AI has raced ahead of the policies that should govern it.
We are entering an era where “move fast and break things” is no longer an acceptable mantra — especially when public trust, sensitive data, and equitable service delivery are on the line.
For New Jersey’s counties, the time to act is now. Not just to adopt AI, but to build the guardrails that ensure it’s safe, ethical, and transparent.
The Policy Gap in Local Government
Today, most local governments face one of two extremes when it comes to AI:
- Paralysis: Avoiding AI altogether out of fear of unintended consequences.
- Blind Adoption: Piloting tools with little to no oversight or internal alignment.
Both paths are risky. And both highlight the same core issue — the lack of a clear AI policy framework at the local level.
While state and federal agencies are still refining broad AI governance principles, counties and municipalities are on the front lines. They cannot afford to wait.
What Makes AI Different from Traditional IT?
Many local leaders ask, “We already have data and IT policies — isn’t that enough?”
Unfortunately, no.
AI systems are fundamentally different in ways that challenge traditional policy assumptions:
- AI learns from data, meaning it can reflect — or amplify — existing biases.
- AI decisions are often opaque, making it hard to trace how a decision was made (a concept known as “black box” logic).
- AI can operate autonomously, introducing new accountability questions for both elected officials and staff.
- AI uses cloud-based APIs and LLMs, raising questions about where public data goes, how it’s processed, and whether it meets state-level compliance rules.
All of this demands new thinking — and new policy.
Building Guardrails: Where Counties Can Start
Rather than waiting for perfect laws or federal mandates, counties can take practical steps today to develop their own AI usage policies:
- Create a Local AI Principles Charter
Establish a set of values to guide any AI initiative. For example:
- AI should enhance, not replace, human decision-making.
- AI should be transparent and explainable.
- AI must respect privacy and data sovereignty.
- AI systems must be auditable and accountable.
This can be a short, one-page living document endorsed by county leadership.
- Identify AI Use Cases — and Red Lines
Map where AI is being (or could be) used. At the same time, define boundaries: For example, “AI will never be used to make final eligibility determinations for public services.”
This keeps departments aligned and prevents unintended misuse.
- Review Vendor Contracts for AI Terms
Ensure contracts include:
- Data ownership and usage clauses
- Transparency around models used
- Requirements for human oversight
- Cybersecurity safeguards for AI-connected systems
If vendors are vague about how their AI works, that’s a red flag.
- Establish an AI Oversight Working Group
This can be cross-functional — IT, legal, department heads, HR, and community reps. It ensures multiple perspectives are considered and helps assess impact over time.
- Educate Staff and Residents
AI literacy is essential. Offer workshops or learning sessions for county employees. Share plain-language FAQs with the public. Transparency builds trust.
A New Responsibility for County Leadership
AI won’t replace local government. But it will change it. Leaders who set clear expectations today will not only protect their residents — they’ll position their counties as models of modern, ethical governance.
AI policy isn’t about red tape. It’s about readiness. The kind that lets your team move forward confidently, knowing the right checks are in place.
Final Word
In the next few years, your county might deploy an AI chatbot, adopt a smart permitting system, or use AI to analyze grant spending patterns. These tools can help — but only if they’re built on a foundation of accountability, transparency, and trust.
Let’s close the policy gap now — and make sure New Jersey’s future with AI is both innovative and responsible.
In partnership with Insight, TechForGov supports this journey through the IGNA™ Framework for responsible AI. For more information, visit Insight here.
To schedule an appointment please contact Himanshu Goil via email at himanshu.goil@ignatiuz.com or call (484) 200-7375 or contact Dana Zampella via email at Dana.Zampella@insight.com or call (732) 648 – 8775.











