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IIJA Report Card Reveals Mixed Grades

Thu July 11, 2024 - National Edition #15
Lucy Perry – CEG CORRESPONDENT


Except for rapid launch of several road and bridge projects across the country, IIJA implementation has been slow over the past two and a half years, say those tracking its progress.
Adobe Stock photo
Except for rapid launch of several road and bridge projects across the country, IIJA implementation has been slow over the past two and a half years, say those tracking its progress.
Except for rapid launch of several road and bridge projects across the country, IIJA implementation has been slow over the past two and a half years, say those tracking its progress.   (Adobe Stock photo
) The largest share of IIJA funds for intercity rail are concentrated on Amtrak’s Northeast Corridor. The high cost of implementation limits the opportunities for service improvements, say analysts, leaving Amtrak treading water.   (Adobe Stock photo
) Thousands of skilled craft laborers have been given jobs on new bridge and highway projects, but electric car owners are still waiting on IIJA’s promised charging stations dotting the interstate landscape.   (Adobe Stock photo
) The nationwide expansion of affordable, reliable broadband internet service that President Joe Biden envisioned has not come to pass just yet.   (Adobe Stock photo
)

Two and a half years after the signing of the Infrastructure and Jobs Act, the grading for results is mixed.

Some say the bipartisan IIJA will advance the nation's infrastructure industry for decades to come. Others say like commuter traffic it's moving way too slowly to see much difference over 24-plus months. How long will it take to see measurable progress? As usual, it depends on whom you ask.

State transportation agencies have put thousands of skilled craft laborers to work on new bridge and highway projects. Yet electric car owners are still waiting on promised charging stations dotting the interstate landscape.

And the expansion of affordable, reliable broadband Internet service that President Joe Biden envisioned has not come to pass just yet.

According to a Scripps News Service report, nearly $500 billion in federal funding was earmarked to support more than 57,000 projects nationwide.

"But we're just starting to see what the full impact of that law will be," wrote Stephanie Liebergen in the June update.

Alison Black, ARTBA chief economist, believes the bill's impact is actually widespread.

"We'll see over the longer run improved mobility, better access across freight corridors," said Black.

She believes we'll also see "improvements to our economy and quality of life as our infrastructure network is improved."

What's Happening Now With IIJA

Leaving control over how to allocate infrastructure funds up to the states, the fed has tracked the biggest single investment up to this summer in Baltimore, Md.

There, the Baltimore and Potomac tunnel, at 150 years old hosting nine million Amtrak passengers yearly, will be replaced at a cost of more than $4.7 billion.

The tunnel's construction means thousands of good jobs and a boost to the American economy.

"Those workers [go] out. They're going to get coffee. They're buying meals. They're purchasing clothing. That creates a ripple effect," said Black. "And then longer term, as these infrastructure improvements are completed, you have the increased mobility."

Adobe Stock photo

That mobility makes it easier for freight traffic to move, she said, "and those things help reduce costs for the American consumer and improve our quality of life."

Liebergen believes Americans will soon start to see construction projects reach completion and new ones launch.

Black believes IIJA is more like a minimum initial investment in infrastructure, and Congress will have to decide whether to keep up the spending.

If spending is an indication, though, the industry is doing just that. ARTBA reported in April construction activity reached a record $16.4 billion.

That's up from $14.4 billion the same time last year. The activity is driven by federal, state and local governments, according to the transportation association.

"Year-to-date work on highways was up 21 percent, while bridge work jumped 20 percent compared to the same time period last year," ARTBA reported.

The association said current market activity, or the put-in-place construction value, monitors work completed monthly on a project, regardless of project size.

"As projects funded by IIJA are put out to bid and contractors start to work, the value of construction and overall market activity has also increased," said ARTBA.

In June, the Senate Environment and Public Works Committee got a status report on IIJA permitting, discretionary grants and new programs.

Shailen Bhatt, FHWA administrator, testified that permitting timelines for projects are improving. He committed to accepting comment and feedback from industry on issues with the Buy America Manufactured Waiver process.

He also committed to updating on IIJA's mandate to evaluate how and what types of vehicles put the most wear and tear on roads.

ARTBA said that because reauthorization of surface transportation programs will begin in earnest next year, assessing program status and progress are crucial.

Why Is Progress So Slow?

The CATO organization maintains that after two years, IIJA has yet to impress beyond road and bridge projects.

The think tank said news reports have exposed two glaring IIJA implementation shortfalls: broadband expansion and EV charging infrastructure.

"Although the IIJA included $42.5 billion for rural broadband, these funds have yet to add any high-speed Internet service to the nation's countryside," said CATO. "And $7.5 billion allocated to electrical vehicle charging infrastructure has produced only eight federally funded charging stations to date.

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The organization said slow progress has been attributed to complex requirements for grantees and the Buy America requirements.

Also affecting these initiatives are preferences for unionized employees and those who have been involved with the justice system.

"These factors, along with general inflation, are also impacting transit and rail projects championed by IIJA supporters," said CATO. "Some of these projects may never materialize, while others will take a decade or more to complete while serving only a limited number of passengers."

The organization notes that the largest share of IIJA funds for intercity rail are concentrated on Amtrak's Northeast Corridor.

It considers the region "a reasonable choice, given the preponderance of passengers located between Boston and Washington."

But "the high cost … limits the opportunities for service improvements. Instead, Amtrak will be largely treading water," believes CATO.

The institute tracked the biggest IIJA-funded Amtrak project, which replaces infrastructure connecting New York and northern New Jersey.

In addition to the Baltimore Potomac job, the project includes a tunnel under the Hudson River and a bridge over the Hackensack River, both dating to 1910.

"These two projects will last well into the 2030s … and will cost $23 billion [before overruns]," noted CATO. "Once done, they will provide important reliability benefits but only minimal travel time improvements for those using Acela to get from New York to Washington."

The institute said Amtrak service could deteriorate while passengers wait for completion of these projects.

"In June 2024, New York area passengers got a taste of what may be ahead as Amtrak service was repeatedly disrupted due to power issues."

CATO believes that rail and bus passengers will likely see little in the way of new travel options or speed improvements over the next five years.

"Once all the money has been spent [by around 2040], it is safe to predict only a small number of new passengers will be lured away from cars and planes."

The Eno Center for Transportation, another think tank, said just because the funds are earmarked doesn't mean the money will instantly flow into the economy.

"It should not surprise anyone that the federal-aid highway program has put its IIJA funding increase to work more quickly than other modes," said Eno. "The main program account, from the Highway Trust Fund, went from $45.4 billion in 2021 to $56.2 billion in 2022 and $56.7 billion in 2023."

That equates to a rate 25 percent higher than pre-IIJA obligations of 2021, noted the think tank.

And while the IIJA provided a 31.5 percent increase in new HTF contract authority for mass transit and bus grants, the increase has not fully been felt, yet.

"New obligations in that account for 2023 were only 6 percent higher than the pre-IIJA 2021 year," noted Eno.

The think tank chalks it up to the fact that so much COVID aid was channeled to transit that providers are spending their use-it-or-lose-it funding first.

Of the $2.05 billion in general fund IIJA money received each year by this account in 2022 and 2023, FTA obligated $782 million in 2022 and $1.522 billion in 2023.

"But this was all dwarfed by COVID aid," added Eno, noting that for FY2021, FTA did not code the CARES Act separately from the regular program.

IIJA established two different major multimodal grant programs, RAISE grants and MEGA project grants. They're funded out of the same budget account.

Three other multimodal grant programs established by IIJA at DOT also are slow to get going.

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Some $7.5 billion was allocated in the bill for electrical vehicle charging infrastructure. However, the effort has produced only eight federally funded charging stations to date across the country.

During an interview with Scripps, Pete Buttigieg, transportation secretary, explained the decision process for where to install new charging stations.

"There are areas where it's just not profitable, at least not yet, for the companies to put them in," Buttigieg said. "We're working with the states to make sure that whether we're talking about apartment buildings in cities or … long stretches of road, you know there's going to be a charger when you need it."

Enacting legislation and realizing its purported benefits are two very different things, said CATO, a lesson now being learned by IIJA supporters.

"The law, which dedicated $1.2 trillion to a variety of infrastructure initiatives, has yet to yield many of its expected deliverables."

The IIJA's nearly $1.8 trillion marks "a profound boost" in infrastructure spending, said the Center for American Progress (CAP), a policy organization.

"IIJA might be remembered as the act that, quite literally, rebuilt America for the 21st century."

But to make the most of new resources, the federal government must address communities' "wariness" of projects, said CAP.

"Deliberate and strategic implementation practices will be needed to ensure the nation's changes to infrastructure mitigate rather than reinforce structural dependency traps." CEG


Lucy Perry

Lucy Perry has 30 years of experience covering the U.S. construction industry. She has served as Editor of paving and lifting magazines, and has created content for many national and international construction trade publications. A native of Baton Rouge, Louisiana, she has a Journalism degree from Louisiana State University, and is an avid fan of all LSU sports. She resides in Kansas City, Missouri, with her husband, who has turned her into a major fan of the NFL Kansas City Chiefs. When she's not chasing after Lucy, their dachshund, Lucy likes to create mixed-media art.


Read more from Lucy Perry here.





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