The Impact of the Infrastructure Investment and Jobs Act on Government Entities

December 10, 2021 | Article

The Infrastructure Investment and Jobs Act (IIJA) was signed into law by President Biden on November 15, 2021, providing funding for certain infrastructure and related projects.

More than $550 billion of the funding is ‘new money’ to be allocated through FY 2026. According to an analysis by the National Association of Counties, eight federal agencies have been awarded funding:

  • Department of Agriculture
  • Department of Commerce
  • Department of Energy
  • Department of Homeland Security
  • Department of the Interior
  • Environmental Protection Agency
  • Department of Health and Human Services
  • Department of Transportation

In addition, a variable number of supplemental appropriations to existing federal programs raises the potential spending to $1.2 trillion between now and FY 2026. Most analysts agree that the IIJA is the largest infusion of infrastructure funds since the creation of the interstate highway system in 1956.

How is the Infrastructure Bill Funded?

According to the Committee for a Responsible Federal Budget, IIJA offsets may range from $200 billion to $547 billion, with most funding from five areas:

  • Repurposing unused COVID-19 relief funds
  • Delaying of implementing a Medicare Part D rebate rule
  • Expanded information reporting of cryptocurrency transactions
  • Extension of fees on government-sponsored enterprises
  • Sales of the broadcast spectrum to communications companies and application of proceeds from previous sales

According to an analysis by the National League of Cities, there is also flexibility allowing local governments to issue tax-exempt bonds to finance rural broadband and certain other projects.

What Areas Are Funded in the Infrastructure Bill?

A summary of the ‘new money’ in the bill by the National Association of Counties has the following analysis by sector:

IIJA has a ‘Buy America’ preference. Waivers may be available if there are inadequate supplies, or if the costs would rise by more than 25%.

What Does the Infrastructure Bill Mean for Governments?

Due to the nature of competitive grants, no state-by-state or county-by-county analysis of funding is available in a manner similar to what was made available for the American Rescue Plan Act. However, it is certain that various state agencies impacted by IIJA will be meeting with municipal officials over the next few months to plan for IIJA funding.

We also do not know the audit impact of the new IIJA programs; however, existing federal programs expanded by the IIJA are subject to single audit.

Be sure to reference our latest overviews of the Infrastructure Bill

This article is provided for general informational purposes only. It is not legal, accounting or other professional advice, as it does not address any individual facts, circumstances or concerns. Before making personal or business related decisions, please consult with appropriate legal, accounting or other qualified professionals.

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