With the four-year anniversary of the Infrastructure Investment and Jobs Act (IIJA) in November, NLC released Rebuilding Together: Examining Federal Funding for Municipal Infrastructure, which highlights how communities of all sizes across the country benefited with an estimated $12.7 billion in IIJA funds awarded to municipalities through federal agencies and state offices.
NLC’s report comes as House and Senate leaders are preparing reauthorization packages for surface transportation and water infrastructure programs before they expire in October 2026. The upcoming reauthorization serves as an opportunity to continue the investment in America’s infrastructure, and NLC has outlined key local government priorities for both transportation and water reauthorization (PDF).
Given IIJA’s significance as a source of funding for infrastructure, NLC examined the flow of funding to the municipal level to help inform Congressional reauthorization discussions.
The analysis shows that federal-to-local direct awards remain the most efficient way to ensure municipal governments, particularly large cities, receive funding to address infrastructure needs quickly and completely.
Rebuilding Together
Through a mix of direct grants from the federal government, formula funding sent to states and federal loans, federal infrastructure programs play a significant role in enabling cities, towns and villages across the country to develop and sustain assets that serve residents and businesses and grow local and national economies.
The report’s key finding is that smaller municipalities (those under 50,000 in population) come out ahead when it comes to receiving IIJA funds. However, they still need federal partners to continue funding support for infrastructure projects and efforts to reduce administrative burdens in applying and managing federal grants.
At the state level, the report examines four infrastructure programs in six states (Alaska, Connecticut, Michigan, Tennessee, Louisiana and Utah). From the state’s block grant programs funded under IIJA, just under half of funds went to municipalities.
While municipalities received $8.6 billion in direct federal funds from IIJA, cities, towns and villages received minimal funding under pass-through state transportation programs, leaving them at a disadvantage for fixing infrastructure assets. By comparison, state energy and environment offices that distributed funding for energy and water projects together allocated more than 70 percent of their funding to municipalities.
$8.6 Billion Obligated Directly to Over 1,600 Cities
(Formula and Discretionary Funding, by State)
Almost $500 Million in State Pass-Through Funds Have Reached Municipalities Through Four Programs in Six States
City Highlight: Louisville, KY
“Local leaders need a partner in Washington, D.C. to help advance the infrastructure projects desperately needed to improve their residents’ lives,” said National League of Cities President, Councilmember Kevin Kramer of Louisville, KY. “Smaller cities and towns are building federal partnerships to build critical infrastructure that will grow small businesses, transport residents to work quickly and safely and nourish thriving communities. Cities, towns and villages of all sizes are ready to work with Congress on infrastructure funding, permitting and regulatory reform to make it easier for communities to handle and administer grants.”
The Louisville Metro Government received several awards under IIJA totaling more than $7 million to advance transportation, environmental and energy infrastructure projects. Even without a full-time grant writer, the city was able to bring together several departments and external stakeholders to coordinate grant applications for the competitive programs.
Find Out More
Portions of data in this report come from NLC’s Rebuilding America Dashboard that is tracking infrastructure investment to local governments across the country. A recent update to the dashboard reveals that nearly 2,000 municipalities have been obligated almost $11 billion in direct IIJA funds, in addition to 383 grants and tax credits under the Inflation Reduction Act. Find out what’s happening near you or compare grant awards for submitting during the final year of IIJA grant applications.
Take Action
With bipartisan Congressional support for the IIJA, infrastructure funding has flown to every corner of the country and will continue to reach more cities, towns and villages over the next year. It is imperative that the federal government continue to provide funding directly to municipalities that own and manage portions of the country’s infrastructure.
Reach Out to Congress
Now is the time for local leaders to let their Members of Congress know the priority programs and funding needs for transportation and water projects in your community.
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