(Source: MIRS.news, Published 08/18/23) (INDIANAPOLIS) – Kevin Pollari of Deloitte Consulting LLP., who leads a capital projects program for state and local governments, says $1.2 trillion in federal infrastructure bucks "is not very much."
"People, protection, and planning – these are three obstacles to money getting spent – getting spent well," Pollari said. "One thing I'll say upfront, and I never thought I'd say this in my entire life . . . but $1.2 trillion is not very much."
Pollari was referring to the historical $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) that was approved by the White House in November 2021. On Tuesday, the 2,702-page infrastructure spending bill was highlighted by the National Conference of State Legislatures (NCSL) at the organization's 2023 summit in Indianapolis. The NCSL session at-hand was titled “Long on Cash, Short on Capacity: The Infrastructure Dilemma.”
He said that roughly half of that $1.2 trillion is "just renewals of money that was supposed to come anyway." Additionally, he mentioned inflation, which hit a peak national rate of 9.1% in June 2022 and stood at a 3.2% annual rate in July 2023.
"That money (has been) kind of shrinking over the past couple of years, so the upshot for state legislators and states, in general, is how to spend this money wisely – how to be smart about it," Pollari said. "A dirty little secret – the track record for infrastructure over the past 50 years is not very good…research shows that 90% to 95% of infrastructure projects are late and over budget."
When it came to the topic of "People" in infrastructure – one of the "Three P's" that Pollari discussed, with “Protection” and “Planning” – Deloitte underscored a need for state governments to seek out workforce development funding ahead of unrolling their projects, and to kickoff workforce engagement programs in K-12 schools.
At the beginning of 2023, the Associated Builders and Contractors (ABC) Inc. reported nationally that an estimated 546,000 extra construction workers would need to be attracted to the industry to meet the year's labor demand. In 2022, the construction industry experienced a monthly average of more than 390,000 job openings, and in the report, ABC Chief Economist Anirban Basu said nearly 1 in 4 construction workers were older than 55.
Deloitte also flagged a need to invite new civil engineers and project planners into the field in order to make the IIJA a worthwhile investment.
"These are good jobs . . . they're dirty jobs, they're hard jobs, they're dangerous jobs . . . but they're good jobs and well-paying, and can pay frankly a lot more than $50,000 a year – a lot more," Pollari said, later adding that the need for people in infrastructure is the "number one" problem.
Moreover, he described how cybersecurity and physical protection of assets need to be part of project planning. He mentioned that having a plan for IIJA-backed projects at the state level, and then also incorporating county and city officials into the conversation of how money should be effectively spent, "is absolutely vital."
“Otherwise, the money is going to be gone,” he said.
Speaking alongside Pollari was Paige Shevlin, the strategic advisor for infrastructure workforce development for the U.S. Department of Transportation.
She highlighted how the federal department is directly distributing $124.4 billion in competitive funding, hoping to "incentivize some behavioral change" by asking states, municipalities and transit agencies to prioritize workforce development in their applicant proposals.
In the IIJA, states are permitted to utilize all of their major highway funding on workforce development. When it comes to the five-year $7.2 billion "Low or No Emission Vehicle Program," 5% of grant awards – with $43 million deployed to 72 different transit agencies already – will be committed to workforce training for worker retention and attraction efforts.
A five-year $5 billion investment for "Consolidated Rail Infrastructure and Safety Improvements" also provides eligibility for "workforce only projects," and $4.5 million has already been directed to the University of Delaware for a rail engineering program that's accessible to historically Black colleges and universities. Amtrak was awarded $8 million for a mechanic apprenticeship program, as well.
