New England may have a strong need for federal funds from Infrastructure Investment and Jobs Act New England may have a strong need for federal funds from Infrastructure Investment and Jobs Act

NEPPC report highlights consequences of apparent shortfalls in region’s infrastructure spending NEPPC report highlights consequences of apparent shortfalls in region’s infrastructure spending

November 29, 2022

Each New England state is receiving more than the national per capita average from the Infrastructure Investment and Jobs Act of 2021. The region certainly could put the money to good use after years of apparent underspending on infrastructure, according to information presented in a new report by Riley Sullivan, a senior policy analyst with the New England Public Policy Center at the Federal Reserve Bank of Boston.

The $1.2 trillion package, commonly referred to as the Bipartisan Infrastructure Law, contains $550 billion in new federal spending for the entire country on public transit, broadband access, roads and bridges, water treatment, and the power grid. Some of the appropriations are specifically for federal projects, including $66 billion for Amtrak maintenance and expansion. But much of the new funding has been allocated to state and local governments over the next five years, from fiscal year 2022 through fiscal 2026.

Sullivan’s report, titled “Recent Trends in Infrastructure Investment and Capacity in New England,” finds that throughout most of the period from 2013 through 2019 (the latest year for which data are available), combined state and local capital spending per capita, including spending on infrastructure, in each New England state was well below the national average. The pattern continued a trend that, according to previous Boston Fed research, began as early as 2000.

“The available evidence did not appear to support the view that additional capital spending by state and local governments in New England during the 2000–2012 period would have been unnecessary because the quantity or quality of existing public capital (that is, infrastructure) was unusually high,” Sullivan writes.

Many of New England’s roads, bridges, and wastewater and drinking water systems require repairs or other improvements likely due to these long-term gaps between infrastructure spending and infrastructure needs. These upgrades could be funded at least partly by the Infrastructure Investment and Jobs Act, or IIJA.

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ASCE: Investments needed in roads, bridges, and drinking water and wastewater systems

From an economic perspective, money spent on infrastructure is considered a good investment. “It is generally understood that quality public infrastructure supports long-run economic growth by improving productivity, increasing the quality of life of residents, and at times spurring private investment in an area,” writes Sullivan.

He notes that the American Society of Civil Engineers has found New England’s infrastructure lacking on multiple counts. According to the ASCE, the shares of New England roads in poor condition as of 2021 ranged from 17% in Vermont to 50% in Rhode Island. In Connecticut, 34% of the roads were in poor condition. The national average was 20%. In Rhode Island, 22% of the bridges were deemed deficient. And Massachusetts will have to invest $12.2 billion on necessary upgrades to its drinking water systems and $8.4 billion on its wastewater systems by 2029, according to the ASCE.

Money that could help to address these needs is coming from the IIJA. “Roads, bridges, and water systems are among the categories receiving the largest appropriations from the IIJA,” writes Sullivan. Over the next five years, New England will receive a total of at least $13 billion for investments in roads, $2.6 billion for bridges, and $3 billion for drinking and wastewater systems. Including the remaining allocations for public transit, broadband, and the power grid, the region will receive $1,626 per capita vs. $1,287 per capita for the country as a whole. Among the New England states, the per capita totals range from $1,327 for Massachusetts to $3,458 in Vermont.

Each state is receiving $100 million to increase its broadband access regardless of its population. That allocation sharply raises the overall per capita allocation for Vermont, which has one of the country’s smallest populations

Some infrastructure spending could appear to have a greater impact

Sullivan notes that the IIJA funding could have seemingly larger effects on different types of infrastructure depending on the state. For example, he writes, the $225 million from the IIJA could substantially reduce the share of deficient bridges in Vermont, where 68 are in need of repair. But the $242 million that is going toward bridge repairs in Rhode Island likely won’t address the need as thoroughly, because the state has 136 bridges in poor condition.

“Infrastructure categories across states will benefit to varying degrees from the IIJA,” writes Sullivan, “but the estimated needs and levels of funding suggest that the act will enable every state to make substantial improvements to a wide range of infrastructure.”

Read the report.

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