The Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and CHIPS and Science Act catalyzed an unprecedented wave of public capital, which would spur private investments to upgrade America’s infrastructure, promote clean energy, and drive reindustrialization. The surge in funding flowed through a complex and expansive mix of grants, low-cost loans, procurement, and tax incentives – creating a labyrinth of programs that strained the capacity of local, county and state governments, many of whom were already stretching their fiscal and administrative capacities in the wake of the pandemic.

As has been documented, since taking office, the Trump Administration has sought to categorically pause programmatic investments and claw back awarded funding. The result has been a blend of confusion and uncertainty as to the status, and future, of federal capital in an array of spaces – for infrastructure, clean energy, manufacturing, and more. While the headwinds in Washington are shifting, the lessons and innovations that we have seen in recent years will be essential for regional economies to continue efforts to modernize infrastructure and position themselves for the next economy – with, or without, sustained federal support.

At the Nowak Lab, alongside partners, we have spent the past 4 years systematically tracking and analyzing the supply and demand sides of federal capital in infrastructure. The Lab developed and managed the Infrastructure (+IRA) Funding Tracker, through which we curated and shared summaries of 500+ Notices of Funding Opportunities (NOFOs) and Notices of Funding Intent (NOIs) – consolidating and simplifying funding opportunities across the federal bureaucracy for local leaders and practitioners.¹ Alongside Accelerator for America (AFA) and the Local Infrastructure Hub, the Lab has profiled success stories, documenting best practices and developing resources to support local leaders throughout project lifecycles.²

Through these workstreams, we have seen and heard firsthand the challenges presented by the sheer scale and fragmented nature of federal capital flows, namely around local capacity. Some localities and states, along with philanthropies, have invested in capacity-building activities to mitigate the limitations of local capacity. While these responses were devised as a temporary response to an era of unprecedented federal investments, it is more important than ever that the support continues to aid localities in their response to the structural and cyclical fiscal pressures they face today.

The Nature of Federal Capital Flows: Distinct Forms and Functions

Flows of federal capital are complex – distribution is spread across multiple cabinet-level agencies and their constituent programmatic offices – each in distinct verticals, with separate mandates, and eligibility criteria. Capital can come in the form of formula or discretionary grants, or in low-cost debt or tax incentives.

The capital resources range from (relatively) small technical assistance and planning grants to substantial investments for large-scale infrastructure projects, like those funding the Brent Spence Bridge and Hudson Tunnel Project. Some of these went through state-level offices, like the Broadband Equity Access and Deployment (BEAD) funding, with notoriously demanding planning and technical requirements.

Demonstrating the dispersion of federal capital, in the Infrastructure (+IRA) Funding Tracker, six cabinet level agencies accounted for nearly 300 curated funding opportunities, managed by separate teams and verticals within those agencies – for DOT, many of these fall under their subsidiary modal agencies like FHWA, FTA, or FAA.

The Surge in Local Capacity, and how to sustain it

Tapping into these pools of capital requires “connecting the dots” between local projects and programmatic funding opportunities. This sounds like an activity on the back of a restaurant menu, but in reality, it is a vastly more complex undertaking. For any investment, local leaders looking to leverage discretionary funds must (1) define the project, (2) match it to grant opportunities, (3) develop and submit grant applications – typically one for each program being pursued, even if for the same project, and (4) be fortunate enough to be selected for funding. At this point, localities typically need to tap into their own coffers for matching dollars – which must have been identified beforehand – and deliver on the project, while meeting compliance and grant management requirements and also iterating the process in parallel for other projects.

Going through this process, in parallel across projects and programs, takes time and expertise to navigate, and at the time of the signing of the IIJA, many cities were facing capacity challenges as they sought to simultaneously respond to the pandemic and its implications, utilize funds from prior COVID relief legislation, and now execute these steps for a substantial project, nonetheless multiple projects.

Ultimately, the last four years have demonstrated that federal funding, even when unprecedented in scale, is not self-executing. Rather, it is contingent on the capabilities of non-federal actors; including local and state government officials, as well as other intermediaries. Some cities, primarily larger cities and those with more budget space, were fortunate in that they had invested, or could invest, in hiring staff specialized in grant-writing and management. However, this was evidently not the case everywhere, particularly in communities that faced capacity constraints before the COVID-19 pandemic and passage of the BIL.

In response, states and cities took varying approaches to address the emerging gap. Rhode Island advanced funding for grant writers, while Pittsburgh established an IRA Hub to serve as a command center for local pursuits of IRA funding opportunities. Additionally, Metropolitan Planning Organizations (MPOs), foundations, and business organizations stepped in to provide support, funding planning and grant writing activities, among other resources. The Local Infrastructure Hub, led by Bloomberg Philanthropies, is an example of one coalitional effort to provide extensive technical assistance to local governments, particularly those with populations under 150,000.

In recent years, as the role of the federal government has shifted and put varying demands on local and state governments, it has become clear how other actors have the potential to enhance local capacities. Now, amidst an era of federal retrenchment, with discussions of the Administration’s domestic policy legislation ongoing and the 2026 surface transportation reauthorization needs on the horizon, leaders must strategize to maintain and enhance their technical, fiscal, and administrative capacities.

Adjusting to New Dynamics

The extent of federal support for infrastructure projects, primarily through technical and financial assistance, has always fluctuated in magnitude and purpose based on political and economic tides. That said, at the project level, delivery has consistently been driven by local and regional actors and dynamics, given that infrastructure investments are tangible investments that people interact with daily be it in access to goods produced elsewhere, employment opportunities, providing utilities, etc. The caveat here may be in the dynamic role which programmatic policies play in setting a framework by which investments must occur.

The magnitude and shape of assistance, from the federal government, has varied depending on political and economic dynamics. In his first term, we saw President Trump propose a $1.5 trillion infrastructure package – a number based on leveraging $200 billion in federal dollars with tremendous private investment; followed by President Biden’s Infrastructure Investment and Jobs Act, which authorized $1.2 trillion in infrastructure spending, including $550 billion in new programs and investments. Both the proposed and passed investments are far from the estimated investments needed in infrastructure. In 2021, the American Society of Civil Engineers estimated a $3.7 trillion gap in the 10-year period from 2024 through to 2033.

The communities that have seen the greatest success in recent years are those that have been able to braid federal, state, local and private funding to advance projects and priorities through innovative cross-sectoral partnerships.

While the Biden Administration’s public investment agenda was largely driven by federal capital, early signals from the Trump Administration seem to lean more on private and local capital being used to unlock federal resources. This requires regional-level strategies and coordination, and local innovations in place-based finance tools like tax increment financing (TIF) and Opportunity Zones – tools that are rooted in interdisciplinary and cross-sectoral partnerships. In other words, to succeed in this new era and dynamic, local leaders will need to maintain and build on the partnerships that have been pivotal to regional development in recent years.

Through the Nowak Lab’s engagement with the Local Infrastructure Hub, we highlighted several innovative public-private partnerships which have either (a) enabled local governments to leverage federal dollars (i.e., Kalamazoo’s partnership with the developer of a new events center to fund and complete resilient infrastructure investments) or (b) advance projects that otherwise could not be afforded (i.e., Mesa’s partnership with multiple fiber providers to install and provide for affordable fiber broadband access throughout the city). These, as well as other examples, are replicable models to enhance local capacity and lengthen the reach of limited dollars that local governments should look to, be it for comparable resilience and broadband investments, or in other classes of infrastructure assets.

Continuing the Infrastructure Decade

The infrastructure moment proved what is possible when local ambition meets public investment. Investments and development have been geared around building infrastructure for today’s age, and tomorrow’s economy – the reindustrialization at a regional level is dependent on continuing to drive forward these investments. To do so, capacity and strong partnerships must be sustained, and innovative approaches to project finance and delivery need to be scaled.

No matter which way the headwinds blow in Washington, place-based leadership needs to drive place-based development for the place-based industrial economy.

¹ In January, we paused updates to the tracker due to the Administration’s early executive orders and actions since.

² This includes the publication of Transformative Projects case stories and additional, comprehensive resources, on resilient infrastructure, transportation electrification, and the Greenhouse Gas Reduction Fund.

Colleen Dougherty and Benjamin Weiser are Research Officers at the Nowak Metro Finance Lab.