NLC grades infrastructure ahead of new bill

The middle of May is the current moving target date for the House Transportation and Infrastructure Committee to announce the markup of a surface transportation reauthorization bill, though cities are already clamoring for relief.

"Maintaining and upgrading this infrastructure has become increasingly challenging as local governments navigate rising construction costs, workforce shortages, and evolving federal and state policy environments."

The quote comes from the National League of City's survey of 75 municipal leaders from across the country discussing a wide variety of asset classes and trends in the public finance that funds them. The report was released on Friday.

"The 2022 report found that most cities utilized a balanced blend of locally generated, own-source revenues and borrowing strategies, while the 2026 results indicate a movement toward greater reliance on local, cash-based funding," said NLC.

The report surmises the changing numbers may be related to a "reflection of the 2026 respondent profile," as 56% of the respondents represent cities with less than 50,000 residents.

The report also reveals that 71% of the respondents "utilize a hybrid approach, combining both debt financing and cash-based funding to support their capital needs."

Only 9% are using strictly debt-based financing and 20% rely exclusively on cash-based funding.

Infrastructure funding flowing from the federal government is facing a ticking deadline clock as the money train provided by the Infrastructure Investment and Jobs Act is scheduled to stop on September 30.

The report includes graded status reports on bridges, broadband, transit, and water systems while revealing that most IIJA funded projects are still in progress or haven't started yet.

"A small number reported projects ahead of schedule, while roughly one third said projects were on schedule," said NLC.

The Congressional schedule is also running behind according to the Eno Transportation Center.

"The House Transportation and Infrastructure Committee has not yet scheduled a markup date for surface transportation reauthorization," said Eno.

"Senate Environment and Public Works has not yet released draft text. Highway Trust Fund solvency, formula program structure, and the future of IIJA-era discretionary grant programs remain among the central policy questions."

The main bill is expected to be priced at about $550 billion with separate titles for rail and transit. T&I has signaled a move away from discretionary grants which favor local municipalities and more towards formula funding, which the states prefer.

Earlier in the week the National Association of Counties threw their support behind the bipartisan Build Housing, Unlock Benefits and Services Act (Build HUBS Act), which targets transit-oriented development along rail lines.

The bill is designed to reform the Railroad Rehabilitation and Improvement Financing and the Transportation Infrastructure Finance and Innovation Act programs.

RRIF and TIFIA loans are administered by the Federal Railroad Administration.

According to NACo the loans are plagued with "programmatic requirements that create significant administrative barriers" and the financing rates "are not enticing enough to outweigh the cost of these programs' other requirements."

NACo is pushing for the Build HUBS Act to be rolled into the surface transportation reauthorization bill.