On May 7, 2026, the FEMA Review Council released its final report recommending a substantial shift in how disaster preparedness, response and recovery are managed nationwide.

As we approach Sled Fiscal Year End (SFYE), SLED agencies are balancing budgets in a constrained environment, addressing rising constituent expectations, tackling growing cybersecurity challenges and supporting accelerated AI adoption.

For industry, this confluence of factors creates both complexity and opportunity. In today’s environment, success in SLED comes down to connecting IT investments to clear and measurable ROI in operational efficiency, modernization, resilience and cost savings.

At this year’s Red, White and You conference, our market intelligence team detailed the ins and outs of what we’re seeing across the public sector. Throughout the sessions, one theme became clear: while success in the public sector market used to rely heavily on institutional knowledge and long-standing relationships, agency buying cycles, and slower opportunity development, the market this year looks different. It’s faster, calling for more efficiency, innovation and cost-optimization.

During this year’s Smart Cities Connect Conference and Expo in Raleigh, NC, one topic garnered considerable attention: AI. Within many city governments, AI is past experimentation and has moved into production. In 2026, city IT leaders are prioritizing  safe, secure, and data-driven AI deployments that deliver measurable outcomes in mobility, public safety, infrastructure management, and climate resilience.

However, as cities move toward operational AI, challenges exist around data readiness, governance, and integration across departments.

In 2023, California Governor Gavin Newsom signed Executive Order N-12-23, directing state government institutions to utilize AI. These state entities are now beginning to move from the theoretical planning phase into the deployment phase with concrete plans.

This year’s Beyond the Beltway conference highlighted key strategic findings from IT leaders that signal where 2026 technology investments will be made and where to focus efforts for success. In 2026, state and local governments are at an inflection point: with rising expectations evolving alongside tightening budgets, staffing and timelines, success will depend on alignment of solutions to modernization requirements, workforce challenges and measurable ROI-driven outcomes.

This week, the National Association of State Chief Information Officers (NASCIO) released it annual State CIO Top Ten Policy and Technology Priorities list for 2026, signaling where state technology leaders are focusing their efforts, and limited resources, in the new year. This year’s list is reflective of the current policy, priority, and funding shifts that have affected SLED agencies most, coupled with the apparent drive towards innovation and modernization.

Over the last decade, technology has profoundly transformed U.S. state, local government, and higher education (SLED). As digital landscapes evolve, a skilled workforce is crucial. Pluralsight has proudly supported state and local governments for a decade by partnering with NASCIO through sponsorships and workforce development initiatives. Explore the top ten tech trends reshaping public service, and see how Pluralsight helps leaders build resilient, future-ready teams.

The One Big Beautiful Bill Act (OBBA), enacted on July 4, 2025, is a significant piece of legislation outlining President Trump's executive agenda and guiding future U.S. tax and spending policies.

On July 23, 2025, the Trump administration released an AI Action Plan, highlighting 90 federal policy directives across three key pillars: Accelerating Innovation, Building American AI Infrastructure and Leading in International Diplomacy and Security. The Plan also supports the tenants of the President’s earlier January 23, 2025, Executive Order 14179, “Removing Barriers to American Leadership in Artificial Intelligence.”