NACTO works with federal lawmakers and the U.S. Department of Transportation (DOT) to represent our members and ensure transportation is safe, equitable, and sustainable. This includes monitoring the federal legislative and regulatory environment, working with U.S. DOT to improve transportation design practices, and advancing policy that helps cities create transportation systems that are safe, sustainable, and accessible.
Infrastructure Investment and Jobs Act
In 2021, former President Joe Biden signed the Infrastructure Investment and Jobs Act (also called the Bipartisan Infrastructure Law) into law. A bipartisan majority of U.S. Senators, including 19 Republicans and 50 Democrats, passed the bill out of the Senate and to the U.S. House of Representatives. There, a few months later, a bipartisan group of representatives sent the bill—without amendment—to the President’s desk.
Federal Transportation Funding
IIJA is a five-year bill that authorizes $1.2 trillion for infrastructure, including roads, bridges, public transit, broadband, and clean water across the U.S. between FY 2022 and FY 2026. Over $550 billion is allocated to transportation of all kinds.
The majority of the transportation funding—approximately $350 billion—flows directly to state transportation departments through “formula” programs, which U.S. DOT distributes to each state. Federally recognized Tribes and transit agencies can also be direct recipients of these funds. The amount of funding for each recipient is pre-determined by metrics such as population. When the funds are further allocated to local entities, the primary grant recipient acts as a pass-through entity for the local entity, which becomes a subrecipient for the grant.
Congress set aside over $150 billion in discretionary (or “competitive”) grant programs to be administered by the U.S. DOT. Many of these discretionary grant programs are open to cities, meaning federal funds flow directly from the U.S. DOT to municipal governments—without going first through states or metropolitan planning organizations.
Discretionary grant funding opportunities for cities include the following programs:
- All Stations Accessibility Program
- Active Transportation Infrastructure Investment Program (ATIIP)
- Charging and Fueling Infrastructure (CFI)
- Congestion Relief Program
- Rebuilding American Infrastructure with Sustainability and Equity (RAISE—now known as BUILD)
- Reconnecting Communities (RCP)
- Safe Streets and Roads for All (SS4A)
- Strengthening Mobility And Revolutionizing Transportation (SMART)
Federal Transportation Policy
Congress also sets or changes policy within transportation funding bills; IIJA is no different. Notably, local control and preferences are given more authority.
In a step forward for cities seeking to streamline design processes, the IIJA contains a new provision granting cities the authority to apply an approved design guide of their choice to federally funded projects on locally owned streets. NACTO’s design guides, recognized by Congress and the Federal Highway Administration, can be used on federally funded local projects, without needing permission from states. (Standards 23 USC §109, IIJA Section 11129)
The IIJA also ends prohibitions on local hiring, instead allowing recipients of federal transportation grants to implement a local hiring preference for construction work.
Cities are using federal funds to meet local transportation needs
The IIJA increased the availability and diversity of federal grants for transportation projects nationwide, including establishing requirements for Complete Streets policies and setting aside designated grants to meet these new standards.
Local governments are eligible for more direct funds than ever before, meaning cities have more discretion to select and fund projects that best serve their communities’ needs. Most—70%—of the funding available directly to local jurisdictions is via discretionary grants. Through early 2025, over 1500 grants worth $22 billion were awarded for locally-led projects. This money means economic opportunity, jobs, and improved access for millions of Americans
In the first three fiscal years of the IIJA, NACTO member cities and agencies received 281 grants, amounting to approximately $3 billion. These funds have been utilized to improve transportation safety, install public electric vehicle charging stations, increase access to shared micromobility options, pilot temporary street design changes, support the construction of Complete Streets improvements, and address structural inequities, among numerous other projects.
However, many of these discretionary grant programs are oversubscribed, and many qualified applicants do not receive funding. For example, more than 350 communities requested over $1.8 billion from the Active Transportation Infrastructure Investment Program—a program that awarded just $45 million to 13 recipients in that first round.
The popularity of these competitive grants demonstrates the enormous unmet demand to fund both transformative projects and routine maintenance in cities nationwide, a need that can only be met with continued allocation of federal dollars.
NACTO’s policy wins include:
- Key reforms to the MUTCD–the federal document that dictates what nearly every American street looks like
- New programs in the infrastructure bill–including Safe Streets and Roads for All and Reconnecting Communities–that bring infrastructure dollars to the local projects that have the most impact
- Encouraging better vehicle design and direct vision standards for vehicles
- Advocating for greenhouse gas emissions to be tracked and reduced
