Equity, tech and climate change: Three big takeaways from the infrastructure bill
Welcome to the first edition of Long Story Short! This week’s issue will cover some of the state and local opportunities in the infrastructure bill, plus a few other notes from what I’m currently working on.
As always, I’d like to hear what you think so please don’t hesitate to reply to this message with your thoughts. And if you like what you see, please tell a friend.
What’s In The Infrastructure Bill For States And Localities
President Biden signed the $1.2 trillion bipartisan infrastructure bill this week and it’s hard to overstate how important the legislation is for states and localities. Could more have been included? Sure. But the big picture is that it not only provides five-year funding stability to existing programs (like the Highway Trust Fund), it invests in the future by creating new programs aimed at things like mitigating the impact of climate change and closing equity gaps.
New funding directly affecting state and local governments in the Infrastructure Investment and Jobs Act includes:
$110 billion for roads and bridges
$73 billion for power grid upgrades
$65 billion for broadband
$55 billion for water systems
$39 billion for public transit
$7.5 billion for a national network of electric vehicle charging stations
Dig in: For a good break down of the numbers, check out the National Association of Counties’ IIJA analysis.
Fighting Climate Change Equitably
Much like the American Rescue Plan Act earlier this year, equity is a key policy issue that’s woven into many of the new funding programs. For starters, it includes $1 billion to create the Reconnecting Communities Pilot Program. Among other things, the program funds removing and retrofitting highways that cut through cities, often separating poorer neighborhoods from downtown.
Another program, Healthy Streets, will have up to $500 million over five years in grants for governments and nonprofits to install cool/porous pavements or to plant trees. The goal of the program is to mitigate urban heat effects, reduce stormwater runoff and improve air quality. Among other things, it funds equity assessments for “mapping tree canopy gaps, flood-prone locations, and urban heat island hot spots.”
Policy implications: Programs such as these could help improve the health and finances of residents in lower income neighborhoods. In a recent op-ed, urban planning experts Joan Fitzgerald and Julian Agyeman noted that 20th century practices like redlining and urban renewal have long been used to segregate and limit people’s opportunities based on race.
Studies have shown these neighborhoods also are much more likely to be chosen as sites for polluting industrial facilities. Formerly redlined neighborhoods have less tree cover and green space today than white neighborhoods, making them hotter during heat waves. And a recent study from Climate Central found that the number of affordable housing units at risk of flooding could triple over the next three decades due to climate change. Low-income residents in New York, Massachusetts, and New Jersey are particularly vulnerable.
Fitzgerald and Agyeman called the infrastructure funding “a down payment on restorative justice: remedying deliberate discriminatory policies that created polluted and transit-poor neighborhoods.”
New Technology for Pilots, Performance Evaluation
The infrastructure bill provides billions of dollars to adopt new technology for things like crash avoidance, carbon capture, electric vehicles, and incentives for advanced cybersecurity technology investment — to name a few. Many of these programs also have an evaluation component meaning that recipients must also report on how well (or not) pilot programs are working.
For example, the Prioritization Process Pilot Program authorizes the U.S. Department of Transportation to award grants of up to $2 million to states and localities to support data-driven approaches to transportation planning that, upon completion, are evaluated for public benefit.
The Strengthening Mobility and Revolutionizing Transportation Grant Program provides $500 million over five years for “SMART Grants” to state and local entities to improve transportation efficiency and safety. Preference is given to projects that include “measurement and validation of the cost savings and performance improvements” and that “encourage the adoption of smart city or community technologies.”
The takeaway: These programs signal a return to the emphasis on evidence-based policymaking promoted during the Obama administration. States and localities that have continued to embrace this data-driven approach could be front runners in the race for grants. For example, SMART grants would likely build upon the DOT’s “Smart City Challenge” launched in 2015 that ultimately committed about $100 million in federal funds. A total of 78 cities developed plans under the initiative but just seven were awarded grants to carry them out.
The new SMART grants vastly expand the initial reach and federal fiscal commitment to this idea. The more than 70 cities who weren’t selected six years ago, such as Boston, Detroit and Las Vegas, also have a distinct advantage over other cities who may be developing plans from scratch.
Dig in: The DOT in 2016 released a report on lessons learned from the seven grant recipients.
Notes From the Field
I recently spoke with Von Welch, Indiana University’s associate vice president for information security, for a cybersecurity story I’m writing. We discussed cyber insurance, which is a topic that didn’t make the story. The cost of insurance is going up and, as ransomware attacks become more frequent, insurance coverage is going down. Here’s what Von had to say about it:
“The challenge with cyber insurance is that the market is so new and that ransomware and other things have caused so much unpredictability. ... It’s such a dynamic space. When you look at insuring other areas like [against the effects of] natural disasters — they don’t tend to have radical changes every year. But I don’t know anyone yet who can tell me what the odds are of having a cyber attack next year.”
My story on cybersecurity in higher education will be featured in Education Dive in the coming weeks.
What I’m Watching
Green bonds. Issuance is expected to hit a record high this year and so are municipal green bond offerings. My friend and colleague Mark Funkhouser explains why local leaders should take advantage of this alignment of financial interests and moral ones.
More spending flexibility in the American Rescue Plan. Legislation now making its way through Congress would allow governments to use some of their ARP funds for highway and transit projects and to address natural disasters.
Rising income tax revenue. The K-shaped recovery and federal stimulus has resulted in the largest median state personal income jump in 14 years. According to Fitch Ratings, state income tax revenues increased by 6.3% last year and this year is expected to produce similar growth. This has implications for public pensions, tax cuts and — of course — the 2022 midterms.
That’s it for this week and if you’ve made it this far, I’d love your feedback. Was this too long? Too short? What did you like and what could you have done without? Please don’t hesitate to reply to this message with your thoughts.
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