On November 15, 2021, the Infrastructure Investment and Jobs Act (IIJA) was enacted by Congress with bi-partisan support. IIJA will fund construction projects in several key sectors, including transportation, telecommunications, electric transmission, broadband, energy and water systems. IIJA represents the most significant nationwide infrastructure investment since the interstate highway system.
It’s important for both public and private sectors to understand that IIJA isn’t a stimulus package. As a result, it doesn’t present the same urgent need to roll out “shovel ready” projects as the American Recovery and Reinvestment Act of 2008. IlJA represents a longer-term, more patient approach which encourages comprehensive investment in modernized infrastructure with long-term generational benefits. As a result, the majority of the spending is expected to take months or years to implement.
In New Hampshire, 698 miles of highway and 215 bridges are in poor condition. Since 2011, commute times have increased by 6 percent and each driver pays an average of $476 annually in costs related to driving on substandard roads. The funding provided by IIJA will help address these deficits by increasing the funding for road, bridge and rail projects by 20 to 40 percent (depending on transport category) over current Federal highway fund formulas. As a result, IIJA will position both public and private entities in New Hampshire to benefit from significant increases in Federal infrastructure investment.
In addition to funds determined by formula, New Hampshire will have the chance to compete for additional funding under various grant programs offered by Federal agencies receiving IIJA allotments. These programs serve all aspects of transportation infrastructure, including air, sea and rail. New Hampshire may also take advantage of funds available for sustainable projects emphasizing improvement of energy efficiency and air quality.
Here are some “fast facts” on IIJA’s impact in New Hampshire:
- Sectors Funded: The transportation sector is IIJA’s biggest winner, with roads and bridges receiving the most funding. Over the next 5 years, New Hampshire will receive 1.4 billion for highways and bridges; 15 million for highway safety and traffic programs; 126 million for public transportation; 17 million for expansion of electric vehicle networks; and 46 million for airport improvements. Additionally, the State will be eligible to compete for 5 billion in rail and crossing improvements. New Hampshire will also benefit from programs which allocate 418 million for water system improvements, and 100 million for expansion of affordable broadband access in rural areas.
- Supply Chain Deficits: IIJA also calls for major Federal investment in the U.S. freight network, port facilities, inland waterways, and rail extensions used for transporting goods. Improving the transportation network will help alleviate supply chain issues and ready the market for future commerce.
- Controlling Agencies: Although the largest portion of the IIJA’s investments will be controlled by the Department of Transportation, budgets will also increase for the EPA and the Departments of Energy, Commerce, Interior and Health/Human Services. In turn, these agencies will provide grants to state and local governments based on formulas, metrics (i.e. population, miles of road, etc.) and competitive applications. IIJA increases funding to the Surface Transportation Block Grant which allocates funds to State and local government for electric vehicle infrastructure, cyber threat protection and ground projects which increase tourism.
- Reduction in Red Tape: IIJA contains long overdue provisions to streamline the Federal environmental review and permitting processes. These reforms could eliminate years of delay and significantly reduce the costs inherent in developing Federally funded infrastructure. IIJA also encourages the use of public-private partnerships (P3s) to better leverage available Federal funds.
- Labor Preferences: In his Executive Order, President Biden noted that high labor standards, including “prevailing wages and a free and fair chance to join a union,” are among the IIJA’s highest priorities. These statements may signal a preference for projects utilizing organized labor or project labor agreements. Non-union shops may need to take a stand to even the playing field and avoid loss of opportunities.
The passage of IIJA should signal all private and public entities in New Hampshire to begin planning conforming projects to utilize formulized funding, and positioning themselves to complete for available grant money. As the law rolls out, States should develop educational resources for public and private entities on the opportunities offered by IIJA, and the process for pursing them.