National Governors Association Lists Priorities for IIJA Funding

As states and territories begin to receive funds under the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58), governors are seeking greater clarification on how these funds may be used. The $1.2 trillion package, signed into law on Nov. 15, includes $550 billion in new funding to rebuild roads and bridges, water infrastructure, resilience, internet and other projects. The National Governors Association (NGA), led by Arkansas Gov. Asa Hutchinson and New Jersey Gov. Phil Murphy, laid out some priorities related to these funds in a Dec. 20 letter of the Office of Management and Budget (OMB).

The letter notes that states and territories have started planning how to best leverage and deploy these funds to maximize their infrastructure investments. As OMB and federal agencies issue guidance and regulations pertaining to the allocation of these funds, NGA is emphasizing the following:

• Provide flexibility for states and territories to use IIJA funds: NGA explained that states and territories can best identify their infrastructure needs and should be allowed maximum flexibility to use IIJA funds as required, including flexibility in providing the matching portion. The association added that states and territories should be the receiving entity for IIJA funds whenever possible to enable consistent, comprehensive, governmentwide infrastructure investment plans.
• Clearly define allowable uses and the review criteria when evaluating state and territorial infrastructure proposals: "Understanding precisely how IIJA funding can be utilized is critical for states and territories when identifying which projects and initiatives should be prioritized,” the letter explains, adding that awarding agencies should use results-focused evaluation criteria, when appropriate, to expand eligibility for certain programs. This approach will recognize the diversity of needs and structures of state and territorial governments, while ensuring the ultimate goals of the IIJA are met, the association says.
• Include reasonable and achievable timelines for dispersing funds, along with clear reporting requirements: The reporting requirements should be streamlined across federal programs for efficiency and should not be overly cumbersome, the letter states, adding that recipient obligations should also be consistent by creating uniform or substantially similar funding applications, processes and reporting requirements.

NGA also called for OMB and federal agencies to use existing programs and criteria to distribute IIJA funds ― when state, territorial and local governments are not the prime recipients ― to avoid administrative burdens. “For new formula-based and discretionary programs, governors ask that the creation of these program be accompanied by guidance that includes clear criteria, a formula allocation process and eligibility information,” the letter explains. Although NGA realizes that changes to guidance and regulations may be necessary under new programs, it urged OMB and agencies to provide advance notice, clarity on why the changes are needed, and explanations for how recipients will be impacted.

These are all important considerations and we’ll be watching to see if these requests are met going forward with IIJA funding.

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