Clarity surfacing on infrastructure bill funding rollout

Yanik

A few months have passed since passage of the Infrastructure Investment & Jobs Act (IIJA). Now, we are getting a sense of when funds from the $1.2 trillion bill will roll out.

The U.S. Department of Transportation (DOT), for instance, launched the Bridge Formula Program last month. The Federal Highway Administration (FHWA) is administering the program, which will provide $26.5 billion to states, the District of Columbia and Puerto Rico over five years and $825 million for tribal transportation facilities.

This year, DOT says roughly $5.3 billion of that larger chunk will be made available to fix bridges across the nation. DOT expects to repair about 15,000 highway bridges with funds from the program.

Additionally, IIJA includes an incentive for states to direct Bridge Formula Program funds to off-system bridges owned by a county, city, town or other local agency. While states generally must match federal funding with up to 20 percent state or local funding, the new program allows federal funds to be used for 100 percent of the cost of repairing or rehabilitating such locally owned off-system bridges, DOT says. Specific to the FHWA, IIJA provides more than $350 billion over five fiscal years for surface transportation programs.

“This record amount of funding, made possible by the bipartisan infrastructure law, will allow states and tribal governments to fix the bridges most in need of repair,” says Stephanie Pollack, deputy federal highway administrator.

Additional perspective

The Infrastructure Investment & Jobs Act is a $1.2 trillion measure passed in November 2021 that will fund various forms of U.S. infrastructure. Photo: iStock.com/kozmoat98

Richard Branch, chief economist at Dodge Construction Network, anticipated bridges – as well as streets – would be among the earliest nonbuilding construction sectors to see IIJA funds.

“We think the earliest sectors to benefit from [IIJA] will be streets and bridges, where there are already established funding programs through the formulas and the highway grants that are in existence,” Branch says. “The same with water and sewer through the EPA (U.S. Environmental Protection Agency) and [U.S. Army] Corps of Engineers.”

Funding for some sectors addressed in IIJA – including electric vehicle infrastructure and broadband – may take some time to build out, he adds.

“We will see some early benefits of [IIJA] probably in the second half of the year relative to the first half,” Branch says. “But we really do expect stronger growth areas to happen in ‘23, ‘24 and ‘25.

“We get a little taste of it in 2022,” he adds, “but the real meat of those dollars will come to the market in ‘23, ‘24 and ‘25.”