The Infrastructure Investment Law Turns One

By Dr. Alison Premo Black  

 

	ARTBA's Dr. Alison Premo Black

“Is the new infrastructure law having an impact?” That is the question I am most often asked in my travels to industry events and on Zoom calls.   

One year after enactment of the historic Infrastructure Investment and Jobs Act (IIJA) the answer is definitively, “Yes.”  

Although IIJA was signed into law November 15, 2021, things did not move as quickly as predicted. States did not have access to the full amount of the historic increase until Congress approved the annual appropriations bill in mid-March 2022. The Federal Highway Administration released the official funding notice April 1, and in May, state departments of transportation began to ramp-up their commitment funds in earnest.  

The IIJA provides Virginia with $8.89 billion to improve roadway and bridge infrastructure networks over five years. The first installment, $1.33 billion for FY 2022, is a 32 percent increase over last year. As of August 30, Virginia was leading the way by obligating $814.5 million (61 percent) of its FY 2022 IIJA highway formula.

Out of all 50 states and D.C., Virginia currently ranks 39 in the number of new transportation construction projects started since IIJA became the law of the land. The funds currently support 747 new projects with more to follow during the year – a sign of the confidence the new law brings to the transportation construction market. By comparison, Ohio, Illinois, and Indiana came in at the top three with each having just more than 1,000 new projects in the pipeline. Reimbursements for work related to Virginia’s new projects stand at $504.6 million as of August 30.   

Some of the most notable projects supported by IIJA funds in Virginia include Staunton districtwide paving ($78.1 million), Fairfax County Route 7 Corridor improvements ($42 million), and the Hampton Roads/Route 58 downtown & midtown tunnel extension ($38.6 million).  

While the commitment of IIJA funds is a positive development for our industry, ARTBA is carefully tracking increases in project costs and material availability. Since late 2020, transportation construction professionals have confronted unprecedented pandemic-related cost increases and often-limited availability for key commodities and materials. The severity of the situation varies from state-to-state. In July, ARTBA leaders met with U.S. Department of Transportation (DOT) officials regarding increases for a variety of inputs and urged the department to allow price adjustment clauses for existing federal-aid contracts, which would provide contractors temporary relief from unforeseen inflationary pressures.  

U.S. DOT officials also engaged ARTBA members in a detailed dialogue on the pending expansion of Buy America requirements to certain construction materials and discussed availability of domestically produced materials and challenges in increasing that supply during the short term.  

Despite these challenges, IIJA remains a net positive for the industry and the country. As we enter the second year of the most significant investment in U.S. infrastructure since the Interstate era, we will continue to see its positive impacts flow through to state and local economies in the form of increased gross domestic product, disposable income, and local tax revenue. The long-term economic benefits of these investments – improved mobility and flow of commerce – will last decades.  

Editor’s note: ARTBA tracks the economic impacts of the IIJA in all 50 states and D.C., along with national commodity and material prices for transportation construction. This information can be accessed in the “Economics” section of www.artba.org.