The Senate EPW Committee is reviewing the IIJA's impact on surface transportation. Stakeholders discuss successes like funding certainty but acknowledge challenges such as inflation and slow grant deployment. Calls for a long-term reauthorization bill before 2026 to prioritize formula funding over discretionary grants. Expectations for safety, efficiency, innovation and improved policy in the transportation sector.
Adobe Stock photo
Since its signing in 2021, the Infrastructure Investment and Jobs Act and contractors with a stake in it have been delivering on its promises, said Shelly Moore Capito, U.S. Senate Environment and Public Works Committee chair in a hearing on a surface transportation reauthorization bill.
In late February, the Senate Environment and Public Works Committee launched a review of the Infrastructure Investment and Jobs Act (IIJA) with a goal of identifying both successes and shortcomings of in the 2021 bipartisan law's surface transportation policy.
The committee is focused on one of the IIJA's "foundational components," the next Surface Transportation Reauthorization Bill. Its current provisions are set to expire in 2026.
Sen. Shelly Moore Capito of West Virginia, committee chair, said the group wants "to continue what is working but discontinue what isn't working."
She believes the hearing comes at a critical time as the provisions expire at the end of next year.
"Since the law's enactment on November 15, 2021, transportation stakeholders have been delivering on its promise," yet facing challenges, she said.
Good, Bad of IIJA
Capito recognized stakeholders at the meeting, there to provide "an on-the-ground update" of their efforts to deliver projects in rural and urban communities.
"On the positive side, the federal highway formula programs received approximately 90 percent of the funding in the IIJA," she said. "This funding has provided states with certainty, and with the flexible project eligibilities to address the transportation needs of Americans."
She noted that she also "championed commonsense provisions" to accelerate projects for the safety and reliability benefits that they will bring.
"I am curious to hear from our witnesses today, if these provisions are being used and whether they have been having the desired impact," said Capito. "Despite the many benefits, I am aware that we have some challenges with the implementation of the IIJA."
She cited inflation as a contributing factor, eating into the overall funding increase provided by the IIJA and increased project costs.
"I look forward to our witnesses' sharing the real-world impacts of this inflation on the work that they are doing," she said.
Another challenge is that many of the new IIJA discretionary grant programs have been slow in achieving their congressional intent, Capito added.
"These programs require significant time and money from eligible applicants," she said. "And once a grant has been awarded, the project grant agreement was often taking more than a year to be negotiated and signed by the prior administration."
The delays in the benefits of each project contributed to ballooning unused obligation authority, said Capito.
Those obligations then must be sent back to the states as part of a process known as the August Redistribution. In 2024, that amount was $8.7 billion.
"This results in an end-of-the-fiscal-year scramble as states seek to put that … funding to use, often putting it toward lower-priority projects," she said. "We advanced a bipartisan fix to help with this issue last year, but the challenge remains and it's growing."
Sen. Sheldon Whitehouse of Rhode Island agreed with Capito's assessment of the positive and negative aspects of IIJA.
Whitehouse, ranking member of the EPW committee, also sees the need for timely passage of the next surface reauthorization bill.
He said he wanted to join colleagues to "take stock of our bipartisan infrastructure law," and "craft policies to fix our aging roads and our bridges."
Whitehouse also wants to see passage of a package before the current law expires in September 2026.
"This would be a reasonable course of action, regardless of who is president," he added.
Among the witnesses who spoke at the hearing was Russell McMurry, Georgia DOT commissioner and AASHTO vice president.
McMurry outlined four principles that he believes Congress should base its reauthorization efforts upon.
First, he wants timely authorization of a long-term federal surface transportation bill by Sept. 30, 2026.
McMurry also called for maximized state flexibility to deliver projects that advance safety, efficiency and innovation.
That means Congress should provide increased flexibility and transferability between formula program categories.
Congress also should combine programs that have similar policy objectives in the next surface transportation bill.
McMurry's third desired principle is for Congress to enable robust federal funding.
"Congress should build upon the base funding level provided in the IIJA through both the Highway Trust Fund and General Funds," said McMurry.
Building into the next reauthorization bill would ensure at the least that federal funding can keep pace with inflation, according to the AASHTO article.
McMurry believes core IIJA formula programs give states funding certainty to plan and deliver properly for the future.
"Federal funding is a foundational investment, vital for the state of good repair for our nation's highways and bridges," he said.
He stressed that moving people and freight safely and efficiently involves more than just building transportation infrastructure.
It is about improving the nation's economy and the quality of life for all of the country's residents, said McMurry.
"That is why the IIJA's federal surface transportation funding has been absolutely vital to every state to safely move people and goods."
It "helps us deliver projects across our very diverse state from the coast to the mountains," added McMurry.
Inflation over the past four years has resulted in hikes in construction material costs, to be accounted for in the next surface reauthorization bill.
McMurry said replacing discretionary grants with formula funding will help states process increases in the cost of materials.
"Under IIJA, discretionary [grant] funds have been slow to deploy for both state DOTs and local governments," he said.
Formula funding, on the other hand, flows faster, he said. And it can be "flexed" so states can focus on their specific transportation needs.
"It enables funds to be distributed to states in a stable and predictable manner," said McMurry.
It also allows states to efficiently deliver projects identified and prioritized through the statewide and metropolitan planning process.
McMurry said Congressional Budget Office estimates have 67 percent of formula dollars ‘spent out' via cash and put into tangible projects by IIJA year two.
Discretionary grants under the IIJA have only been ‘spent out' at a rate somewhere between 1 percent to 7.4 percent by year two, said McMurry.
That's attributed to core formula programs fund projects that are in the constantly moving [planning] pipeline.
However, discretionary grant awards have often targeted projects that have not been considered through the planning process, said McMurry. He also stressed that formula funds allow states to transfer some of those funds between programs.
This, in turn, helps state DOTs deliver "the right project at the right time" to meet their transportation system needs.
McMurry asked that Congress increase the extent to which formula funding is prioritized over discretionary funding.
He wants 95 percent or more of authorized Highway Trust Fund highway dollars to go to apportioned programs for states in the next reauthorization bill.
"Formula dollars provide stability, predictability and efficiency, allowing state and local governments to plan and deliver projects effectively," he said. "If there is a desire to address additional priorities, the most efficient way … is through expanded eligibility within existing formula programs."
Everyone Has Their Priorities
Capito stressed that safety, supply chain and technology are the bases of any committee policymaking. She has bipartisan support for her drive to update IIJA.
McMurry wants to see the implementation of proven roadway safety strategies continue. He also wants promising new and innovative countermeasures and technologies accelerated.
"An evolution of our traffic safety culture is needed, and states are laser-focused within our organizations and with our outside partners to promote safety," he said.
Gary Johnson of Granite Construction asked the committee members for commitments to long-term funding in the surface transportation reauthorization.
He wants a five-year document to guide and clarify policy for industry stakeholders.
Representing the Transportation Construction Coalition, he said continued long-term duration for the next surface transportation bill is imperative.
"Extensions and short-term bills rob states of their ability to plan over the long term," said Johnson.
The result, he testified, is "a reliance on smaller maintenance work rather than transformative transportation investment."
Though the Senate committee has not mentioned a multiyear bill, the House Transportation and Infrastructure Committee also is looking at reauthorization.
Rep. Sam Graves of Missouri, house committee chair, said it would be a collaborative effort involving congress members and industry stakeholders.
Sean Duffy, U.S. transportation secretary, wants environmental permitting rules overhauled, and safety and efficiency technologies adopted.
"I want aggressive change. I don't want incremental change. I want fast change that's going to transform the way that we do business."
Duffy said he wants "to use more private capital. I want more technology, and I want more innovation in your space."
He said he would recognize "innovators who create and find ways to better build projects they care about.
"I'll reward the innovators who create and find ways to better build and more effectively build the projects that you guys care so much about," said Duffy. "And for those who innovate and are creative, I'm going to give you more freedom, and I'm going to give you more money to do your projects." 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.
Today's top stories
