Budget uncertainty could hamper state and local tech skills development
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States and localities must find alternative ways to support their digital inclusion efforts amid budget cuts, experts say.
State and local leaders must find a way to carry out their digital equity plans if they want their communities to stay abreast of tech’s growing role in society, experts say.
With industry leaders hailing innovations like agentic artificial intelligence as the next big thing in 2026 and beyond, government leaders who do not prepare their residents for a tech-forward future could fall further into the digital divide and miss out on the benefits of a modernized workforce and economy, experts say.
The COVID-19 pandemic galvanized a lot of investment into digital inclusion and skills programs, as most jobs, classes and services entered a remote environment, but now states and localities are grappling with how to maintain the momentum of their digital inclusion initiatives amid budget and funding uncertainty and competing priorities.
Digital inclusion programs help people learn how to navigate online tools and services, but they can also offer tech training and skills development to siphon people into tech roles. Ultimately, such initiatives lay out the basic, fundamental skills people need to leverage more advanced tools like artificial intelligence, Amy Huffman, policy director at the National Digital Inclusion Alliance, said.
But leaders faced a major blow to their efforts to build tech-savvy communities when the Trump administration cancelled more than $2 billion in federal funding under the Digital Equity Act in May 2025. Ending the grant program has left state and local governments “to pick up the pieces” of their digital equity plans with far less support or resources in the new year, Huffman said.
Stepping into 2026, “I think we’re definitely in a period where we’re going to see state and local governments step forward and [lead] on different issues, and I think [digital skills development] is one of them,” she said.
Leaders must consider how to replace or supplement the absence of federal support by leveraging different funding pots, Huffman said. As an example, she pointed to American Rescue Plan Act funds that leaders have turned to rely on for digital inclusion purposes.
In Massachusetts ARPA funds will help the state continue its RANGE program, which aims to improve broadband and digital access in public and affordable housing units. Through the program, residents can also leverage digital literacy and education services that can help boost their employment opportunities.
A digital equity program in Illinois is taking a different approach by relying on donations. The Illinois Department of Commerce and Economic Opportunity's Office of Broadband is managing the Eliminating the Digital Divide Fund, which accepts financial support from broadband customers via their monthly bill, philanthropic donations or contributions from internet service providers and other private sector organizations. Those donations go toward a range of resources, such as digital skills classes for residents and individualized or community-based tech support services.
Nondeployment funds made available under the Broadband Equity Access and Deployment program present another resource for state and local leaders, said Drew Garner, director of policy engagement at the Benton Institute for Broadband and Society.
The BEAD program is aimed at supporting states’ projects to build out broadband infrastructure, but funds that have not been allocated yet could also be applied to purposes that fall under broadband adoption, like digital skills training, he explained.
Despite a rocky rollout of those funds over the last five years, the National Telecommunications and Information Administration, which oversees the BEAD program, has indicated that states may retain access to the nondeployment funds. In that case, states could tap into $20 billion in funding for purposes like workforce development, skills training, cybersecurity and AI preparedness, Garner said.
While the path forward for leaders is largely unclear, the growing need for a tech-ready community and workforce is hard to ignore, he said.
“Governments are missing a huge opportunity to make their services more efficient and to save money when they don't invest in the digital skills of their population,” Garner said.