Workshop on Leveraging IIJA Funds

The generational opportunity created by IIJA cannot be fully realized without the combined efforts of federal, state, and local officials working collaboratively and closely with the private sector.

By Cara Dougherty, Glenn Grimshaw and Tom Curtin

During the NGA Infrastructure Implementation Workshop with Governors’ Infrastructure Advisors and AASHTO leaders, a panel of experts discussed the opportunities to leverage Infrastructure Investment and Jobs Act (IIJA) funds and extended their support to Governors’ advisors on the planning, development and roll out of future infrastructure projects. The panel comprised Morteza Farajian, Executive Director, Build America Bureau; Katie Kramer, Vice President, Council of Development Finance Agencies; David Agnew, Managing Director, Macquarie Group representing the Global Infrastructure Investors Association (GIIA); and Avi Schwartz, Principal, Infrastructure and Capital Projects, Deloitte.  

From left: Morteza Farajian, Build America Bureau, David Agnew, Macquarie Group, Katie Kramer, CDFA and Avi Schwartz, Deloitte.

David Agnew shared a global perspective from both GIIA and Macquarie that the Infrastructure Investment and Jobs Act (IIJA) creates a “tremendous opportunity” for the private sector to work with states and their policy advisors across sectors, including but not limited to energy, broadband, and transportation. He expressed that investing across state agencies is critical, and investor groups, such as Macquarie, are eager to help states and territories capitalize on federal dollars to make the most of this historic moment.

Katie Kramer provided important context, noting that despite the historically groundbreaking levels of funding attached to IIJA, there is not enough direct federal funding to execute all critical projects. Ms. Kramer, whose organization represents state economic development finance organizations, encouraged states to ask when developing projects using IIJA funds whether to leverage private capital to find a solution. Taking a holistic view of investing in infrastructure, according to Ms. Kramer, includes asking “who are our global and capital market connections? Which risks are best for the private sector to take on?” As an organization, CDFA helps states identify solutions that foster growth and facilitate less expensive project solutions.

During the discussion, Kramer pointed to the success of KentuckyWired, a public private partnership program, in promoting equitable access to broadband through a public private sector arrangement. This program led to the construction of over 3,000 miles of high-speed fiber optic cable in every county in Kentucky and was paid for by leasing half of its fiber strands to private companies. Kramer also reminded states of the inclusion of equity considerations in IIJA and emphasized the need to implement fair and just practices in all infrastructure work. She encouraged states to support minority owned companies, convene a diverse group of people in project planning and management, and consider how a project might yield sustainable job opportunities and growth.

Avi Schwartz, Principal at Deloitte and leader of the Infrastructure and Capital Projects program, observed IIJA as a “transformative opportunity” to incorporate technology into state and local infrastructure projects. In March, Schwartz and his colleague Mark Blumkin, Engineering & Construction Consulting Managing Director, published a report titled, Leading Practices in Infrastructure Investment: Identifying and Overcoming Infrastructure Gaps, which provides states and local governments with tools to assist with the planning, funding, financing, and construction phases of infrastructure projects. Shwartz reflected on two main takeaways when analyzing IIJA’s funding complexities and engaging in stakeholder conversations. First, states have long since struggled to identify appropriate funding sources that will pay for development and construction costs, but technology offers a way forward to bridge the gap. Second, there is a shortage of talent in the construction and trades sectors – which is contributing to a particularly high degree of competition between contractors – as well as in other roles such as engineering that are critical to IIJA implementation. (For more on the competition among contractors, see U.S. Chamber of Commerce Q4 Construction Index). 

Morteza Farajian, who leads the U.S. Department of Transportation’s Build America Bureau, provided a comprehensive overview of the programs offered by the Bureau to assist states and territories with project financing. The Bureau offers financing through its Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs, which provide low-cost financing and flexible terms to Federal, states, territories, local entities, and the private sector in certain circumstances. The Bureau also offers funding through its transit-oriented development pilot program and the forthcoming asset concession program and provides a range of technical assistance resources. Farajian underlined the ease for states of undertaking a value for money assessment when considering project procurement options and emphasized that not all projects will be suitable for private sector involvement. For those that are successful, significant project efficiencies and savings can be achieved for the community.

Throughout the discussion, panelists acknowledged that the generational opportunity created by IIJA cannot be fully realized without the combined efforts of federal, state, and local officials working collaboratively and closely with the private sector.. All panelists encouraged states to “include the private” when discussing how to leverage funds to provide long-term, sustainable infrastructure investments, and to normalize the practice of asking asking the question, “Is there a role for the private sector in this project?”

In addition to the NGA IIJA Implementation Resources page, the NGA has created a State Resources Center on Innovative Infrastructure Strategies to share resources and highlight state and territory best practices. This page explores a range of financing and funding tools that can be used for infrastructure projects of varying sizes and across sectors.