In 2021, the bipartisan Infrastructure Investment and Jobs Act (IIJA) became law, investing hundreds of billions of dollars in the nation’s transportation, water, broadband, and energy systems over five years. Now, Congress is weighing how much money and what types of investment to include in the reauthorization of several transportation programs.

Our research shows that although IIJA increased infrastructure spending, its implementation faced several challenges.

• Funds were not always used effectively. Evidence shows the law did not result in the construction of substantially more transportation infrastructure.
• The law did not always result in less funding for polluting projects. Moreover, recent congressional and Trump administration actions have eliminated funding for several of the law’s environmentally focused programs.
• Though some elements of the law increased funding to historically disinvested communities—such as those with low incomes and high shares of people of color—many IIJA programs reinforced existing inequities by rewarding jurisdictions with greater preexisting resources. Most transportation funds are distributed directly to states through a formula, but many states do not focus that investment to disinvested areas.

The reauthorization of federal transportation programs offers Congress a unique opportunity to address these challenges and improve Americans’ quality of life. Federal policymakers should consider the following three strategies to guide deliberations around reauthorization. 

1. Guarantee effective grant use 

Infrastructure spending has declined as a share of the US economy over the past half century, and the nation trails other countries on investment in road and railway infrastructure. Much—or even all—of IIJA’s expanded spending has been absorbed by mounting labor and materials costs. As such, it did not substantially increase the construction of actual infrastructure. This situation has compounded the nation’s inadequate infrastructure expansion and poorly maintained infrastructure, failed to meet the travel needs of the 36 percent of Americans without reliable car access, and caused excessive spending on transportation projects that do not expand people’s access to destinations where they want to go.

To improve the effectiveness of federal grantmaking, the reauthorization of transportation programs should do the following:

• Pursue improved staffing practices. Hiring high-quality, in-house state and local engineering staff members who can keep projects on time and on budget, rather than relying on external consultants, helps reduce project costs. This could mean providing incentives for in-house projects and—especially for communities unable to do so because of inadequate capacity—expanding federal technical assistance for planning, development, and project delivery.
• Improve project quality. The federal government could prioritize projects designed to expand access to destinations, rather than those that simply move cars  through more car lanes and vehicle miles traveled—common measures of success for transportation investments today. Federally mandated transportation plans at the state and metropolitan levels should prioritize access, rather than car travel, as one in three Americans can’t rely on a personal vehicle. The government should also evaluate whether previous investments achieved goals such as congestion relief.
• Expand funding. Once investment strategies become more effective and project quality improves, more spending is needed to guarantee that infrastructure funding matches the growing population and economy. Policymakers could consider establishing a direct pay tax benefit that would enable states and localities to fund high-priority projects through tax credits.

2. Increase environmental sustainability

The transportation sector is the largest contributor to US pollution. Though IIJA included provisions designed to reduce pollution, it was not associated with increased spending on environmentally friendly transit projects, at least over the short term. Meanwhile, much of the law’s funding is being used on polluting highway expansion, and the Trump administration and Congress have reduced funding for projects not designed around road expansion. These cuts coincide with transit agencies facing a “fiscal cliff” of declining revenue that undermines their ability to provide bus and rail services.

To help reduce the transportation sector’s environmental harms, reauthorization of federal infrastructure programs should do the following:

• Prioritize maintenance. Rather than focusing on highway expansion, states and localities receiving federal dollars should prioritize the long-held bipartisan goal of keeping roadways in a state of good repair before building new roads. This approach can limit the induced demand resulting from ever-increasing traffic from highway expansion.
• Account for pollution when prioritizing state and metropolitan plans. The federal government should require short- and long-term transportation investment plans to demonstrate how they will result in reduced pollution, and noncomplying jurisdictions should lose funding.
• Fund transit operations. The federal government should enable localities, states, and large transit agencies to use federal dollars to support public transit operations, which are typically funded by state and local sources. Expanded funding to guarantee a minimum level of transit access—particularly in places where land-use regulations encourage higher densities near transit—could help reduce car reliance while expanding affordable mobility.
• Require cities, metropolitan areas, and states to plan together for housing, land use, and transportation. Reducing emissions requires planning for transportation and land use simultaneously, yet most metropolitan planning organizations have failed to coordinate them, worsening the housing supply crisis and limiting transit ridership. Federal rules should require states to make this connection to receive funding.

3. Leverage transportation investments to fund the communities that need them most 

US infrastructure investments have disproportionately exposed communities of color and neighborhoods with low incomes to pollution and led to the destruction of neighborhood assets. IIJA was intended to reverse some of these harms, and it did increase the distribution of funds to some of these communities,  especially those with low-income residents. 

Even so, the application process for competitive grants is challenging, and counties with low incomes and few government staffers are less likely to win funding. Moreover, formula programs, which account for most transportation spending, tend to reinforce the status quo.

To ensure that federal grantmaking reverses historic harms and provides funding where it is needed most, transportation programs should do the following:

• Ensure limited-capacity communities have access to funds. Competitive grant programs should prioritize proposals from low-capacity communities and reduce application complexity. The federal government should expand opportunities for tailored technical assistance, such as through the refunding, expanding, and refining of the Thriving Communities program, to help communities improve their transportation plans.
• Rewrite formulas to support communities with the greatest needs. Formula funds could be partly distributed through regional block grants that enable metropolitan and rural areas to get their fair share, once adjusted for population and need—and then distribute funding to their priorities without requiring state involvement.
• Renew investments in efforts to reduce infrastructure’s historic harms. Cities are attempting to reconnect their communities, such by constructing caps over highways, replacing highways with surface boulevards, and creating alternatives like transit lanes and cycleways. But there is inadequate funding for these efforts, and new initiatives are needed to support them.

Thank you to Beth Osborn, Janneke Ratcliffe, Harriet Tregoning, and Mariia Zimmerman for providing detailed feedback on drafts of this article.