Special Briefing

• Special Briefing: AI in Government—More Efficiency but Fewer Workers?

  The launch of ChatGPT in 2022 sparked an “AI arms race” with trillions of dollars in investment and profound implications for productivity and employment. For a discussion of how generative AI and related technologies are reshaping public sector operations, workforce needs, and infrastructure planning, Penn IUR and the Volcker Alliance convened a panel of government, academic, and industry experts for “Special Briefing on AI in Government—More Efficiency but Fewer Workers” on November 20, 2025. William Glasgall, Penn IUR Fellow and Volcker Alliance Public Finance Adviser, Susan Wachter, Co- Director of Penn IUR and Wharton professor, and our expert panel discuss the state of America’s infrastructure and how some states are developing strategies to better identify and fund needed investments. Panelists include: • Jon Hartley, Policy Fellow, Hoover Institution • Leigh Palmer, Vice President, Google Public Sector LLC • Megan Kilgore, City Auditor, City of Columbus, Ohio • Howard Neukrug, Executive Director, The Water Center at Penn and Professor of Practice, Department of Earth and Environmental Science, University of Pennsylvania • Thomas Sanchez, Professor, Landscape Architecture and Urban Planning, Texas A&M University NOTABLE QUOTES Hartley: “As of the end of September, about 37 percent of American workers claim to be using generative AI at work.” Hartley: “I think it's still a TBD in terms of what the overall labor market impact is going to be, but I think we're just in some of the early innings of what's a much longer baseball game.” Palmer: “We're just at the tip of the iceberg on the potential for this technology.” Kilgore: “We need more GOATs—not sheep. People who are curious, courageous, and willing to climb into unfamiliar terrain as technology reshapes how we’re constantly working and ultimately serving the public.” Kilgore: “We need to view building human infrastructure as well as investing in forward-thinking AI technology as on the same level of vitality as investing in that traditional form of hard infrastructure… Equally as important, governments have to start investing in the skills necessary to allow our public sector leaders and our workers here to really use those tools well: data literacy, ethical reasoning, and creative problem solving. I do believe AI will absolutely redefine public service.” Neukrug: “AI-powered digital twins can simulate entire water networks, helping planners test technologies virtually before real-world deployment, saving time and resources.” Hartley: “Conditional on using generative AI to complete a task, roughly two-thirds of the time that would traditionally be dedicated to that task is saved."

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• Strategies for Closing the US Infrastructure Gap

  From the deteriorating Gowanus Expressway in Brooklyn, New York, to the aging dams that supply about 70 percent of California’s water, America’s public infrastructure is badly in need of fixing. The nation is estimated to have accumulated about $1 trillion in deferred infrastructure maintenance, and even more will be needed to rebuild or retrofit roads, water plants, schools, and electrical grids to withstand the punishments of increasingly extreme weather. William Glasgall, Penn IUR Fellow and Volcker Alliance Public Finance Adviser, Susan Wachter, Co-Director of Penn IUR and Wharton professor, and our expert panel discuss the state of America’s infrastructure and how some states are developing strategies to better identify and fund needed investments. Panelists include: • Geoffrey Buswick, Managing Director & Sector Leader in U.S. Public Finance, S&P Global Ratings • Camila Fonseca Sarmiento, Director of Fiscal Research, Institute for Urban and Regional Infrastructure Finance • Hughey Newsome, Chief Financial Officer, Sound Transit • Leslie Richards, Professor of Practice, City and Regional Planning, Weitzman School of Design and Former CEO of SEPTA • Fatima Yousofi, Senior Officer, The Pew Charitable Trusts. NOTABLE QUOTES Notable Quotes -Fatima Yousofi: “Just like we've seen with public pension underfunding in the past, these hidden costs can quietly accumulate for years until they really start crowding out spending priorities and straining government budgets.” -Fatima Yousofi: “Pew's research shows that states have accumulated more than $105 billion in unmet road and bridge repair needs since 1999. And at the same time, the EPA estimates that we might need to spend another $1.2 trillion over the next 20 years to modernize our drinking water, wastewater, and stormwater systems.” -Camila Fonseca Sarmiento: “In recent years, there has been an increase in the funding sources that are available to address deferred maintenance. I'm not saying that there is funding that is high for deferred maintenance. Actually, when we look into the 10 case studies, the funding that is allocated for deferred maintenance only covers 4% of the total need, so that is very low.” -Geoffrey Buswick: “In 25, we're on track for nearly $600 billion in municipal bond volume, and that is an all-time high mark after last year, which was also an all-time high mark.” -Geoffrey Buswick: “So, in the industry, we've become accustomed to federal government incentivizing capital projects through regulations, grants, project matching funds, but as these tools are being curtailed or cut at the federal level, more of the costs are likely to fall to other levels of government. This could further challenge this needed upkeep in spending. And at a time when the American Society of Civil Engineers is estimating about $3.7 trillion of capital needs above current funding levels over the next 10 years, simply to get to a level of good repair?” -Leslie Richards: “you can't maintain your way out of a 50-year-old fleet. At some point, the equipment simply needs to be replaced. And that's where the financial pressure comes in.” -Leslie Richards: “I often describe it this way, using capital funds for operations is like using your roof repair fund to pay the light bill. It keeps things working today, but the storm is still coming, and you need a strong roof. And SEPTA is not alone in this. Agencies all over the country are being forced into the same trade-offs.” -Leslie Richards: “we can't keep running 21st century service on 20th century equipment with 19th century funding models. We have to build a new approach, one that values reliability, transparency, and safety of the people who ride and operate these systems every day.” -Hughey Newsome: “agencies, as best as they can, have to think through how do you find other stable sources, given that, there's always going to be volatility coming from Washington.”

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• Special Briefing on the Muni Debt Boom: Record Borrowing Amid Budget Strains

  William Glasgall, Penn IUR Fellow and Volcker Alliance Public Finance Adviser, Susan Wachter, Co-Director of Penn IUR and Wharton professor, and our expert panel address the record-shattering boom in state and local borrowing even in the face of federal spending cuts and pressure on budgets. How long the boom will continue in the face of conflicting federal, state, and local priorities will be the big question for investors and governments over the coming year. Panelists include: • Matt Fabian, President, Municipal Market Analytics • Fitzroy Lee, Deputy Chief Financial Officer and Chief Economist, Office of the Chief Financial Officer (OCFO) • Vikram Rai, Portfolio Manager and Macro Trader, First New York and former Head of Municipal Markets Strategy at Wells Fargo • Sheila Weinberg, Founder and CEO, Truth in Accounting and • Mark Zandi, Chief Economist, Moody's Analytics. NOTABLE QUOTES Notable Quotes -Mark Zandi: “This is the first time I can recall where all those indicators are screaming, we’ve got a problem.” -Matt Fabian: “The Muni market has a chance to be part of the solution to make it not as bad as it might otherwise be.” -Sheila Weinberg: “The strength in the bond market is impressive but potentially misleading…this heightens the risk to investors and to taxpayers.” -Vikram Rai: “I never really believed the Fed was independent. I think there is an element of politics that goes on there… Once the President has control of the Fed, they can maneuver the yield curve.” -Fitzroy Lee: “The downsizing would cost the District about $300 million in revenue losses per year, about 3% of our own source revenue.” -Mark Zandi: “For every percentage point increase in the effective tariff rate, it adds about 10 basis points to inflation…and reduces GDP by 7-8 basis points.” -Matt Fabian: “On the demand side, the Muni market has been functioning fantastically…So long as nominal yields are high enough, individuals will continue to buy the bond.”

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• Special Briefing on State Budgets: The Big Squeeze

  Join William Glasgall, Penn IUR Fellow and Volcker Alliance Public Finance Advisor, and Susan Wachter, Co-Director of Penn IUR and Wharton professor and our expert panel as we address the rapidly darkening outlook for state and local budgets and what this means for policymakers, taxpayers, and investors. Panelists include Jonathan Womer, Director, Rhode Island Department of Administration; Emily Brock, Director, Government Finance Officers Association Federal Liaison Center; Shelby Kerns, Executive Director, National Association of State Budget Officers; Vikram Rai, former Head of Municipal Markets Strategy, Wells Fargo; Teryn Zmuda, Chief Economist, National Association of Counties. As the widely adopted July 1 start of their new fiscal year approaches, many states are facing fiscal challenges that few governors were anticipating as they delivered their annual budget messages only a few months ago. Even though states started 2025 projecting healthy cash reserves of almost $300 billion, that cushion will be tested by the Trump administration's suspension of tens of billions of dollars in U.S. grants as well as potential cuts by Congress to federal Medicaid funds. A possible threat to the federal tax exemption on most municipal bonds, the impact of a global tariff war, and the rising likelihood of a U.S. recession will also further constrain state and local budgets even as several years of record post-COVID federal stimulus comes to an end. Notable Quotes: “Other budget pressures that states are grappling with right now include education and housing affordability. On the revenue side, we have a slowing economy, as well as the impact of tax reductions that have slowed revenue growth.” - Shelby Kerns “State and local governments themselves bear 75% of the cost of infrastructure in this country, and we do that by design. We like to make capital decisions locally. But we need to have the market to underpin those streets, clean water, schools, affordable housing, and so much more.” - Emily Brock “The real difficulty on the operational side for states right now is the uncertainty that’s coming out of Washington. As the [Trump Administration] proposes new executive orders, in particular cuts, and then the courts turn those around in a different way, you’re left with a lot of volatility from an operational perspective, trying to figure out how to plan and strategize going forward.” - Jonathan Womer “Another challenge which I believe is facing the muni market is a liquidity crisis. I worry that we could see more broker-dealer exits from the muni market, which would hamper liquidity very adversely.” - Vikram Rai Be sure to subscribe to Special Briefing to stay up to date on the world of public finance. Learn more about the Volcker Alliance at: volckeralliance.org Learn more about Penn IUR at: penniur.upenn.edu Connect with us @VolckerAlliance and @PennIUR on Twitter, Facebook and LinkedIn Special Briefing is published by Penn IUR and the Volcker Alliance, and made possible by funding from The Travelers Institute. The views expressed on this podcast are those of the panelists and do not necessarily reflect the position of the Volcker Alliance or Penn IUR.

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• Special Briefing | Mayors under Stress: Financing Local Development around the World

  Cities around the world are facing a host of challenges. As the Organization for Economic Cooperation and Development observed recently, "places are rethinking how to stay competitive on the global stage. Technological change, the green transition and shifting global value chains are reshaping local economies." Join Eugenie Birch, Co-Director of Penn IUR, and William Glasgall, Penn IUR Fellow and Volcker Alliance Public Finance Advisor, as our panel of current and former global mayors examine what cities should do now to set their future agendas for growth and shared prosperity. Speakers include Steve Adler, former Mayor, Austin, Texas; Stephanie Miner, former Mayor, Syracuse, New York; Nasiphi Moya, Mayor of Tshwane, South Africa; and Jaime Pumarejo Heins, former Mayor of Barranquilla, Colombia. Notable Quotes: “Today, the (Barranquilla) waterfront gets 10 million people visiting a year, from all types of places, from all of the socioeconomic strata of the city. It paid for itself because when we reappraised the land around it, within seven years, we were able to recuperate the investment." - Jaime Pumarejo Heins “As a city, we must be creative about how we fund our needs. We want to ramp up revenue collection, but we don’t want to do that without taking care of the root cause, which is economic growth.” - Nasiphi Moya (Syracuse, New York, is currently facing) “a $27 million deficit—and that’s with a 2 percent tax increase. Normally, when this kind of thing happens, you would turn to the state or even the federal government to ask for help. But given the uncertainty that’s going on with the federal government, and this idea that there’s a recession, there’s not going to be that kind of aid coming through.” - Stephanie Miner (The [Austin, Texas] city council is) “projecting a $13 million shortfall this year, projected to go up to $35 million in the next couple years. We have stagnant sales tax revenue and a property tax revenue constraint imposed by our legislature.” - Steve Adler Be sure to subscribe to Special Briefing to stay up to date on the world of public finance. Learn more about the Volcker Alliance at: volckeralliance.org Learn more about Penn IUR at: penniur.upenn.edu Connect with us @VolckerAlliance and @PennIUR on Twitter, Facebook and LinkedIn Special Briefing is published by Penn IUR and the Volcker Alliance, and made possible by funding from The Travelers Institute. The views expressed on this podcast are those of the panelists and do not necessarily reflect the position of the Volcker Alliance or Penn IUR.

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