What the Expiration of the Federal Infrastructure Law Could Mean for the Nation’s Roadways

September marked the expiration of the 2021 Infrastructure Investment and Jobs Act (IIJA) and the $326 billion it provided for the repair, modernization, safety, resilience, and asset management of the nation’s roads and bridges.

As the IIJA winds down, Congress is considering the next round of federal roadway investments, including how much money to provide to states and through which programs. Although congressional lawmakers are likely to preserve core highway funding, the future of many discretionary grants, particularly those supporting resilience, modernization, and bridge upgrades, remains unclear.

For states, that means budgeting for roadways without a clear picture of how much federal support will be available for these priorities.

The IIJA’s impact on road and bridge investments

The bulk (83%) of IIJA funding for roads and bridges came in the form of $273 billion in formula funding—which is money allocated automatically based on factors such as population and roadway miles—through long-standing statutory programs, such as the National Highway Performance Program, which give states a predictable base of federal dollars for maintenance, preservation, and other priorities. The IIJA increased formula funding by 32% compared with the 2015 Fixing America’s Surface Transportation (FAST) Act. (See Figure 1.)

The IIJA also created new formula programs to address critical repairs and modernization, including support for bridges and resilience, that traditional programs weren’t designed to fund. And it provided $53 billion in competitive grants, available directly to local governments without the need for a state to act as intermediary, to fund certain large-scale projects.

The IIJA focused heavily on the decades of deferred maintenance that have left many of the nation’s bridges in poor condition. To address this critical problem, the law provided increased direct federal support for bridge construction, preservation, and maintenance than previous laws, approximately $40 billion—or 22%—more than the FAST Act. The IIJA also expanded eligibility for this funding to bridges owned by state and local governments, not just those on the national highway system.

However, IIJA funding was not without its challenges. Rising construction costs reduced the value of federal funding, with one analysis estimating that highway construction cost increases reduced the purchasing power of Federal Highway Administration dollars by $21.5 billion from late 2020 to 2022. Labor shortages, procurement bottlenecks, and supply-chain disruptions also slowed projects. As a result, the additional funding bought less and took longer to be spent than anticipated. If these pressures persist, they could further strain state transportation budgets as IIJA winds down.

Looking ahead, although Congress has routinely renewed core formula programs, many of the IIJA’s new formula and competitive grant programs relied on one-time funding. The future of those resources will depend on what’s included in the next surface transportation law.

What reduced federal funding could mean for states

According to a 2024 report by the American Society of Civil Engineers, maintaining IIJA funding levels through 2033 would still leave a $1.2 trillion gap between total surface transportation needs and anticipated investment. However, a return to 2019 funding levels would increase that gap to $1.8 trillion, increasing the burden on state and local governments.

Without continued access to the IIJA’s expanded funding and eligibility, states will need to raise new revenue and increase their own spending on critical upgrades to keep many of the nation's worst-performing bridges safe and functioning.

And although some IIJA funding streams for climate-related modernization and resilience are expected to continue under the next funding law, others could be scaled back or eliminated. For instance, the Promoting Resilient Operations for Transformative, Efficient, and Cost-Saving Transportation (PROTECT) Program has supported $2.3 billion in transportation resilience projects to protect critical roadways from flooding, storm surges, and other extreme weather effects, and to create or reinforce emergency evacuation routes. But current federal proposals would eliminate a portion of the program, dramatically scaling back one of the few dedicated funding sources available to help states proactively strengthen transportation systems against extreme weather and potentially stalling implementation of state resilience improvement plans, which identify critical at-risk transportation assets and lay out strategies to tackle problems.

Funding under a short-term extension

In addition to creating individual programs, the IIJA paired traditional road and bridge funding from the Highway Trust Fund with substantial advance appropriations for roads, bridges, and other transportation investments that expire after fiscal 2026. That distinction matters should the next federal transportation law be delayed. Congress has historically used short-term extensions to continue Highway Trust Fund programs, but that approach would not automatically continue the IIJA’s advance appropriations. Unless federal lawmakers specifically renew or replace these advance funds, states could see an immediate 13% reduction in road and bridge funding—even under a short-term IIJA extension—complicating transportation budgeting and planning.

Eli Gullett and Ora Halpern are senior associates, and Fatima Yousofi is a senior officer with The Pew Charitable Trusts’ state fiscal policy project.