Transportation infrastructure, such as roads, highways, airports, bridges, and other major parts, drives the nation’s economy and connectivity. Transportation infrastructure involves large funds due to the large scale of projects. If you are wondering how the transportation infrastructure funding is managed in the USA, you can check the full details here.
Transportation Infrastructure Funding USA
The infrastructure funding in the US has been improved in the last few years, thanks to the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. The act offered over $1.2 trillion in funding for infrastructure development, where transportation and highway funding have improved a lot.
The transportation infrastructure funding in the US is funded by the federal, state, or local authority, where the government even has various grants and programs to support transportation and meet the demands of the public, and improve the connectivity around the USA.
The IIJA 2021 act authorized one of the greatest transportation programs for the FY 2022-2026 to improve the infrastructure, which includes funding over $580 billion for highways, rail, airports, public transport, and other transportation-related infrastructure.
The Department of Transportation administered the federal grants and various programs for the funding of transportation projects. While the state and local authorities fund the transportation through the taxes or revenue they generate.
What are the federal grants and programs for the transportation infrastructure?
The US government has introduced various federal grants and programs to support the transportation infrastructure. These programs and federal grants are administered by the Department of Transportation and its subsidiary agencies, like the Federal Highway Administration, Federal Aviation Administration, and others.
There is a wide range of grants, but typically we have two types of grants – formula grants ( for states’ eligible projects) and Competitive grants (based on the proposal, project merit, national priorities, for projects that meet the criteria). With so many grants and programs for the transportation infrastructure, here we have listed a few of the major grants:
- INFRA grant program:
- The program is used to improve the infrastructure rebuilding America through funding highways & freight projects that will enhance the safety, reliability, and efficiency across urban and rural areas.
- The eligible applicants for this program are the state, local government, and political subdivision of local government, federal land management agency, tribal government, multi-state corridor organization, metropolitan planning organization, and multistate eligible entities.
- All Stations Accessibility Program:
- It’s a competitive grant for all stations’ accessibility that assists in capital funding, relocation infrastructure, and other areas.
- The ASAP recipients include allocated funds for public transportation, local government entities, or state government entities that operate the legacy rail fixed guideway public transportation.
- BUILD Grants:
- This grant from DOT replaces the Transportation Investment Generating Economic Recovery and supports the transit systems, roads, ports, rail, and public transportation.
- The projects under the BUILD Grant are generally capped at around $25 million.
- RAISE grants:
- The Bilateral Infrastructure Law offers RAISE grants for multiple surface transportation projects, such as transit, ports, roads, freight, and other transportation projects.
- The grant has some funding restrictions depending on the type of project, project area, and US state.
What does ASCE say about the transportation funding in the USA?
The ASCE says the performance of transportation infrastructure is improving due to the federal and state investment. However, the report card also mentioned that transportation funding in the USA will have an investment gap of $3.5 trillion in the next decade.
According to the ASCE Report Card, you can check the estimated funding gap for transportation infrastructure in 2024-33 in the table below:
| Transportation Infrastructure System | Investment gap (in billions) |
| Aviation | $113 |
| Bridges | $373 |
| Rail | $32 |
| Roads | $684 |
| Transit | $152 |
| Inland Waterways & Ports | $13 |
| Water Transportation | $13 |
| Surface Transportation | $1242 |
The ASCE says the major factors affecting America’s infrastructure are the investment gap, Climate change, and unreliable data.
How to manage the funding for the transportation infrastructure?
As per the DOT vision for the transportation infrastructure, the best way to finance transportation projects is through project finance, where we can gather great capital and repay the loans or return on investment through the revenue generated through the project.
The revenue can be generated through tools, user fees, and other sources that will not only finance the project but also help in the maintenance of the project and ensure longevity. Apart from project finance, public investment is another way to fund the transportation infrastructure.
The use of public-private partnerships will help in the operation, delivery, and quality of the transportation projects, as well as with the funding. So, apart from the federal grants and state assistance, there are many other ways to help with the transportation infrastructure financing.
The transportation infrastructure in the US is on a nice track with federal and state investment grants, but the investment gap is concerning; hence, to continue the growth, the government has to find a solution for long-term investment.