Paving the Street for Infrastructure Growth

By Leo Garcia and Emily Maher| Could 11, 2022 |

In regards to the Fiscal Street to Restoration Temporary Collection

This six-part temporary sequence examines state CSFRF spending priorities a yr after this system launched and showcases examples to assist inform policymakers as they fight the continuing impacts of the COVID-19 pandemic.

Infrastructure is the bedrock of society. Our water remedy, communication networks and transportation programs promote well being and allow commerce. At its core, the COVID-19 emergency pertains to public well being. Nevertheless, the interconnected nature of the pandemic additionally uncovered deficits in water, sewer and broadband infrastructure. Financial shutdowns within the early days of the pandemic debilitated authorities income. On the identical time, work and faculty went digital and elevated the necessity for digital connectivity. These components revealed present system inadequacies and highlighted the necessity for funding in infrastructure. To deal with these points, 40 states and territories have invested roughly $31.6 billion in Coronavirus State Fiscal Restoration Funds (CSFRF) in direction of water, sewer, broadband and common infrastructure, representing 24% of all allotted funds. This temporary outlines the commonest makes use of of those funds in direction of infrastructure.

Broad Latitude within the Use of Restoration Funds In direction of Infrastructure

The U.S. Division of Treasury’s last rule permits states and territories to spend money on “obligatory” enhancements to water, sewer, and broadband infrastructure. In keeping with the rule, a obligatory challenge is one which achieves or maintains an satisfactory degree of service and is an economical resolution contemplating different choices. The ruling additionally permits water and sewer tasks that align with sure Environmental Safety Company classes. For broadband, states and territories are inspired to prioritize investments in fiber-optic infrastructure and tasks that serve households and companies with out web entry.

Common infrastructure tasks are sometimes thought-about ineligible makes use of of the fund as a response to the pandemic. Nonetheless, states can fund common infrastructure as a authorities service, as much as the quantity of income loss they incurred. The ultimate rule additionally encourages infrastructure tasks to implement sturdy labor requirements and prioritize challenge employers that rent native staff and/or staff from traditionally underserved communities.

40 States and Territories Prioritizing Infrastructure

Priorities In Infrastructure


The closure of faculties, companies and leisure institutions elevated reliance on digital connectivity for studying, working, and socializing. This exacerbated an current divide between the digital haves and the digital have-nots. In 2019, 21 million People lacked high-speed web entry. When the pandemic accelerated transition to digital life, these with out adequate entry to the web encountered limitations to employment, training, and well being. A number of states and territories have used fiscal restoration funds to advance broadband infrastructure and digital entry, some examples embody:

  • Indiana: $250 million to the Rural Broadband Fund for broadband grants.
  • California: $3.2 billion to assemble a statewide open-access middle-mile broadband community.
  • Arkansas: $309 million to the Division of Commerce for 32 broadband tasks and their administrative prices.
  • Delaware: $10 million to the Division of Expertise and Data for broadband infrastructure.

Consuming Water Infrastructure

Entry to secure consuming water is vital to public well being. However entry to wash water just isn’t assured. In keeping with the U.S. Water Alliance, 44 million People are served by water programs in violation of the Protected Water Consuming Act. Moreover, rising water shortages resulting from drought and inhabitants development threaten to overburden home consuming water programs. To mitigate these considerations, quite a few states and territories have utilized restoration funds for water infrastructure, equivalent to:

  • Alabama: $225 million to enhance entry to wash water via investments in water infrastructure tasks.
  • Maine: $5 million to help the remedy of consuming water, environmental testing and administration of contamination brought on by chemical substances.
  • North Carolina: $80 million for the Division of Environmental High quality to deposit within the Water Infrastructure Fund for the Consuming Water Reserve.
  • Virginia: $50 million to the Division of Well being to help equal entry to consuming water at small and deprived group waterworks.

Stormwater and Wastewater Infrastructure

Elevated urbanization is inflicting the quantity of impervious floor space to develop, which aggravates city flooding and ends in $9 billion in damages yearly. Stormwater infrastructure regulates the circulate of stormwater and helps stop flooding, defending communities and pure habitats. To adjust to present rules, public investments in stormwater infrastructure should enhance by $8 billion yearly.

Wastewater infrastructure treats water utilized by households, companies and industries earlier than being safely launched again to the surroundings. Insufficient remedy of wastewater poses varied dangers to public well being and ecosystems. By 2019, 15% of wastewater remedy facilities had already reached or exceeded their design capacities, and $81 billion was required to fill this funding hole. States and territories have invested restoration funds in stormwater and wastewater infrastructure to deal with these deficits. For instance:

  • Northern Mariana Islands: $7 million for the growth of water and wastewater programs.
  • Florida: $100 million to the South Florida Water Administration District for tasks that scale back dangerous discharges to the Caloosahatchee and St. Lucie Estuaries.
  • Michigan: $66 million for pump station backup turbines for use in stormwater pumping stations.
  • Oregon: $15 million to the Division of Environmental High quality for offering monetary help to public companies or certified establishments for the restore, alternative, improve or analysis of residential or different on-site septic programs.

Common Infrastructure

Common infrastructure is important for financial improvement, streamlining the connection between folks, items, and providers. Common infrastructure consists of however just isn’t restricted to roads, ports, bridges, railroads and airports. Poor infrastructure just isn’t solely detrimental to bodily security but in addition ends in misplaced productiveness and income. Analysis has discovered that visitors congestion and delays in air transportation can value the U.S. financial system $155 billion a yr. States and territories have made vital infrastructure investments utilizing fiscal restoration funds, together with:

  • American Samoa: $20 million for investments in seaport services, and $15 million for investments in airports.
  • Colorado: $182 million to the State Freeway Fund, together with funding for the Revitalizing Important Streets Program, to assist communities implement transportation-related tasks and for the acquisition and improvement of the Burnham Yard Rail Property.
  • Louisiana: $563 million for income alternative to the Transportation Belief Fund for prices related to precise challenge supply, development, and upkeep of transportation and capital transit infrastructure tasks of the state and native authorities.
  • North Dakota: $317 million for state, county and township roads and bridges.

This temporary touches on solely a few of the methods states have used fiscal restoration funds to finance investments in water, sewer, broadband and common infrastructure. Further examples and program particulars could be present in NCSL’s allocation database.

States, territories and the District of Columbia should obligate their federal restoration funds by December 2024 and spend them by December 2026. Till then, NCSL will proceed monitoring how these funds are prioritized and allotted.

Leo Garcia is a coverage analyst with NCSL’s Fiscal Affairs Program. He covers financial improvement, funds, and tax points for NCSL.

Emily Maher is a senior coverage specialist with NCSL’s Fiscal Affairs Program. She covers funds, tax, state-local, and financial improvement points for NCSL. 

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