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Transportation, Drinking Water Top State Uses of New Infrastructure Funds

By Mark Wolf  |  August 1, 2022

States face opportunities, challenges and questions—a lot of questions—implementing and spending the $1.2 trillion in the federal Infrastructure Investment and Jobs Act, the muscular and massive attempt to bolster the nation’s highway, public transit and drinking water systems, among others.

“Building With Billions—An Infrastructure Update,” a session at NCSL’s Legislative Summit, brought together a panel of policy experts for an update nine months after the act’s passage.

Wendi Wilkes, a senior adviser at the Environmental Protection Agency, said the EPA ranked second only to the Department of Transportation in the amount of funding received.

"Those of you dealing with this understand and recognize how tense and emotional conversations over drinking water can be." —Wendy Wilkes, Environmental Protection Agency

“It’s something we’ve dreamed of for years: around $50 billion to invest in the nation’s water,” Wilkes said. “The majority is going to flow through drinking water and clean water state revolving funds.

“It’s about $2 billion in a normal year; this year it’s $7.7 billion, a really major increase of money flowing into your states. We have an opportunity and mandate to do better with the funding. The first priority is to increase investments in disadvantaged and underrepresented communities. The nation’s water infrastructure is aging and leaves health and the economy at risk. The situation is worse in places where investment never came.”

The bill dedicates $2 billion to President Joe Biden’s goal of replacing all the nation’s lead pipes. That’s far more than has ever been dedicated in the past, Wilkes said.

The fight against PFAS, referred to as forever chemicals, also received major funding.

“Those of you dealing with this understand and recognize how tense and emotional conversations over drinking water can be,” she said.

New Programs Rolling Out

Susan Howard, director of policy and governmental relations for the American Association of State Highway and Transportation Officials, said the core of the transportation funding is a five-year reauthorization of the Surface Transportation Act, which she referred to as “reauthorization plus, plus, plus, plus, plus.”

“This bill is notorious for the large number of discretionary grant programs,” she said. “Many of them are beginning to be rolled out, but that’s going to be a slow progress.”

All states will get money for the electrification of vehicles, she said. “For a lot of states, this is their first foray into this. The goal is to be able to charge their vehicle close to the interstate anywhere in the country.”

Chris Piper, legislative liaison and policy analyst with the Colorado Energy Office, said the state has already set the stage to take advantage of the buckets of funding, adding that Colorado expects that more than 80% of its energy will be renewable by 2030.

“We are considering a comprehensive set of market transformation incentives to drive additional greenhouse gas reductions, including geothermal, hydrogen, building decarbonization and electric school buses,” he said.

Colorado recently signed a deal with Wyoming, New Mexico and Utah to develop the Western Inter-State Hydrogen Hub, aiming to make hydrogen a clean fuel source which, he said, could bring up to $2 billion in hydrogen production funding to the region.

Build New Stuff or Maintain Old Stuff?

Moderator Caroline Sevier, director of government relations for the American Society of Civil Engineers, said the infrastructure act was “not meant to be one-size-fits-all” and that there will be “ongoing conversations about new construction versus maintaining existing assets.”

“We have states in the Northeast with bridges that are well past their 50-year design life,” she said, “and we might have states on the West Coast that are building new capacity.”

Wilkes said water funding can fund both new and existing projects: “As we learn more about what’s in our drinking water, new infrastructure might be necessary.”

She noted that many Summit session attendees may have water structures in their districts that are 80 to 100 years old and that there are 150,000 water systems, compared to about 3,300 electric systems. “It’s a massively fractured sector,” she said, adding that officials will have to look to the needs of the future as they plan for today’s needs.

“Funding could wind up propping up water systems that are unsustainable,” she said.

Inflation and workforce issues will likely contribute to delays on projects.

“It’s been concerning, especially on the costs of materials,” Howard said. “We’re seeing materials (prices) 100% to 200% higher than they were a year ago: lumber, copper, aluminum, fuel is huge. It’s taking a little more creative thinking. We’re seeing workforce issues from consultants to contractors. It’s a big concern and there is a lot of focus on it on Capitol Hill.”

Wilkes added that the water sector workforce is ready to retire. “It’s coming. We’ve been saying it’s coming for a decade. Some folks stayed on, some retired early. The workforce could use some help. These are recession-proof jobs.”

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