California, Texas, and New York are likely to cash in on the trillion-dollar infrastructure package when the bill gets on President Joe Biden’s desk.
But far less populous states – like Montana and Alaska – will get most of the money per capita.
The government said Californians should budget at least $ 44.56 billion in infrastructure funding, the largest amount for any state, with highways and public transportation alone accounting for about $ 34.8 billion.
Texas came in second with an estimated allocation of $ 35.44 billion, between $ 26.9 billion in estimated highway funding and $ 3.3 billion in estimated public transportation funding. New York in third place is expected to receive $ 26.92 billion.
The full list of estimated allocations for each state can be found at the end of this article.
CNBC’s analysis shows that Vermont, Montana, Wyoming and Alaska lead the way in estimated per capita infrastructure spending with at least $ 3,500 per inhabitant. California’s estimated per capita allocation is less than $ 1,250 per inhabitant.
In the hope of delivering on Biden’s election promises before the 2022 midterm elections, the White House has billed the plan as a generational investment. The Senate overwhelmingly approved the $ 1 trillion infrastructure bill earlier this month to rebuild the country’s fragile roads and bridges and fund new climate resilience and broadband initiatives. Parliament wants to pass the law by October.
The government advocates that the infrastructure plan “will stimulate the economy, strengthen our competitiveness, create good jobs” and improve a variety of other metrics.
It is important to note that the White House estimates are summaries based on the budget allocation in previous statutes. Current legislation could change the formulas that determine what factors determine how much money a state or city receives.
Current White House estimates also ignore competitive funding programs for specific, economically significant one-off projects. Often times, municipalities can use these grants to fund an isolated project when the federal government determines that a particular bridge or tunnel has an oversized economic impact on a region.
All improvements are likely to come at the local level, as states and municipalities are the stewards of about 90% of non-defense public infrastructure and typically bear 75% of the maintenance costs, according to the Center for Budget and Policy Priorities. a progressive think tank.
Washington typically funds large infrastructure initiatives through the Department of Transportation, which awards grants to states. These grants can come from several funds, including the Highway Trust Fund, which generates a significant portion of its income from gasoline taxes.
The calculations that determine how much money one state receives relative to another are set by law and can vary slightly over time as lawmakers update spending models. However, some factors remain consistent, said Vikram Rai, head of Citi’s municipal bond strategy.
“The Department of Transportation receives an allocation and it decides how to allocate it to different states and locations,” said Rai. There are many factors that determine the size of a grant, but some factors are simple.
Rai explained that a state’s population is usually highly dependent on how much it receives in relation to total funding. The reasoning there is clear: the more people live in a federal state, the more the roads, bridges and other traffic areas in the state are worn down.
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It is therefore sometimes not surprising that New York, Texas and California are at the top of the funding list as three of the most populous states in the country.
Other factors that play a role in determining the amount of the grant can be a little more complicated.
The grants can be larger or smaller depending on how many major cities a particular state has. Or, if the grant is flagged for urban areas, the amount will be determined by how many people live in a particular city.
In the FAST Act of 2015, an Obama-era transportation law, grants for urban areas were determined in part based on whether the city had more or less than 200,000 residents.
These grants were then further increased or decreased due to other factors: the presence of a S-Bahn, for example, or the number of kilometers that the city’s buses traveled on a given day.
These factors are clear in the current White House calculations.
New York, New Jersey and Connecticut are expected to receive $ 15.2 billion in public transportation based on formula funding. That’s 24% of the total for public transportation, even though these states make up about 10% of the U.S. population, suggesting the government believes the vast public transportation infrastructure in these three states deserves additional attention.
On the flip side, Louisiana, which is struggling with potentially billions of dollars in damage from Hurricane Ida, is expected to raise $ 1.01 billion for bridge replacements and repairs, which is sixth out of all states and about 4.1 % of the total for bridges.
The American Society of Civil Engineers said in a recent report that Louisiana, which relies heavily on bridges to cross much of its low-lying landscape, ranks fourth in the nation for total bridge area but second in number of structurally defective bridges on the basis of square footage.
The Federal Transit Administration, a division of the Department of Transportation that oversees financial support for public transit systems, has released flowcharts showing how the formulas in the FAST Act determine the grant amount.
