Federal Highway Chief Urges Cities to Go After State Infrastructure Money

The country’s top highway official encouraged hundreds of city leaders to aggressively pursue projects that could be funded through the new federal infrastructure law – even if that means going after money that typically flows through states.

Stephanie Pollack, the deputy administrator who leads the Federal Highway Administration, emphasized that point as part of an address to officials gathered for the National League of Cities conference in Washington, D.C., this week.

Most of the transportation money in the infrastructure package signed by President Biden last year will be distributed to states using formulas written by Congress, Pollack explained, so local governments should make their case for getting a share of that money from their own states, as opposed to just going after federal grants

“I’m not saying, ‘don’t apply for grants.’ I’m saying don’t only apply for grants,” she said.

Traditionally, she said, the FHWA has been “agnostic” about what states do with their transportation money once they get it from the federal government. 

But that is not the attitude of Biden administration officials, including Transportation Secretary Pete Buttigieg, a former mayor of South Bend, Indiana, Pollack said. Buttigieg’s second-in-command, Polly Trottenberg, is also a former local official, having previously led New York City’s department of transportation, Pollack noted.

“The expectation in this administration is that, yes, even the money the states initially get, that just means Congress initially gave it to them. It does not mean they cannot share,” Pollack said.

While city and state transportation departments often don’t see eye-to-eye, Pollack urged local officials to not just avoid the state agencies. That would deprive them of the biggest, easiest source of funding for their projects.

“The money is in formula funds [that go directly to states],” she said. If local officials decide they only want to focus on applying for grant money, “you are walking away from the largest amount of dollars that is available in the bipartisan infrastructure law. I don’t think you want to do that, at least not without understanding what those funds are for and what you might use them for.”

Lingering Controversy Over Guidance

The Biden administration, she said, wants to make sure that the money given to states is not wasted.

“We need to make sure that money achieves these goals that the president has laid out: equity goals, climate goals, asset-condition goals, economic development goals [and] future-proofing investment goals, ” Pollack said. 

Pollack did not mention it Monday, but many Republican officials and state transportation departments have objected to the scrutiny that she and other Biden administration officials want to place on how states spend their infrastructure money.

In December, Pollack released guidance outlining her agency’s preferences in how the federal infrastructure dollars would be spent. The memo, for example, said the agency would favor projects for pedestrians and cyclists, while it would be more skeptical of projects that widened existing highways.

That sparked a backlash among Republican governors, GOP senators and state transportation departments that argued that FHWA was overstepping its authority.

In Washington Monday, Pollack argued that states should be working closely with local officials, something she said she did when she led the Massachusetts department of transportation.

“We still believe in state flexibility, but we also believe in accountability,” she said at the National League of Cities gathering, “and we also believe in partnerships.”

“Just because the money initially goes to the state department of transportation… doesn’t mean [the state agencies] can’t sit down and talk with communities, cities and counties about what they might want,” she said.

Pollack encouraged the city leaders to work with both state and federal transportation departments to find ways to pay for the upgrades they need. She told a packed room of mayors and city council members to keep an open mind about how they got their funding, because often many different federal programs could potentially help them.

The Biden administration, she said, was taking several steps to help small communities, in particular, apply for federal grants. The administration’s next budget proposal, she said, would include money to help small municipalities hire grant writers who could help them apply for federal grants – something officials in small jurisdictions say they cannot usually afford with their limited budgets.

Range of Spending Options Under New Law

Most money flowing from the federal government is reserved for bigger, busier roads that are disproportionately owned by state – rather than local – governments.

But there are key exceptions, Pollack noted. States can use their allotments of federal money for safety projects on any roadway, and for any bridge carrying a public road, regardless of who owns it.

In fact, a provision of the new infrastructure law specifies that the federal government will pick up 100% of the cost of projects for off-system bridges, if those bridges are owned by a local government. If states choose to use the money for state-owned bridges instead, they will have to provide the customary 20% match, Pollack noted.

Local officials could also use other approaches to get state funding for their projects, she said.

“The Pennsylvania Department of Transportation did not give much money to Pittsburgh for its bridges, and then as soon as the Fern Hollow Bridge collapsed, Pittsburgh went to the Pennsylvania DOT knowing that the bridge was fully federal-aid eligible, and PennDOT is now using its formula funds to build a new bridge for $25 million,” Pollack said.

Had PennDOT agreed to fix the bridge years ago, it would not be spending as much money to replace the bridge, she argued.

“What I say to my friends in state DOTs is, if you don’t want to do it out of the goodness of your heart or because you’re good partners, just think about dollars and cents,” Pollack said.

Political pressure is another effective strategy, she added. When Pollack served as the transportation secretary in Massachusetts, she said, Gov. Charlie Baker would often tell her to fix a bridge, because the governor heard from a mayor complaining that school buses and ambulances couldn’t get over a weight-restricted span in their area.

“[Baker] did not ask me, he told me to take our money to fix the bridge,” Pollack said.

The FHWA chief also encouraged city officials to take advantage of new programs in the Infrastructure Investment and Jobs Act, like provisions for electric vehicle charging stations, carbon dioxide pollution reduction, climate resilience and “complete streets” road redesigns.

She also noted that the infrastructure law made it easier for cities to use “local hire” provisions for federally funded improvements, eliminating long-standing restrictions that previously made those efforts difficult to carry out.