Now is the time for local governments, higher education institutions, development authorities and other public entities to best position themselves to harness the once-in-a-generation federal funding flowing out of Washington, D.C. The return of Congressionally Directed Spending, the Bipartisan Infrastructure Law and the Inflation Reduction Act present public sector entities three unique opportunities to fund needed projects.
1. Congressionally Directed Spending is Here to Stay in Congress:
In 2021, Congressional leaders announced the return of congressionally directed spending, or earmarks, after a decade-long moratorium. As a result, a diverse set of public entities have been able to petition individual lawmakers for government funding, in amounts ranging from tens of thousands of dollars to as high as the tens of millions. The House Republican majority announced in 2023 that they would continue the congressionally directed spending program, though process and approval may differ from previous iterations.
Examples of Entities Receiving Congressionally Directed Spending in 2023:
2. Bipartisan Infrastructure Law (BIL):
In Nov. 2021, President Biden signed the Infrastructure Investment and Jobs Act (P.L. 117-58), formally enacting the Bipartisan Infrastructure Law (BIL). The BIL provides $973 billion over five years from Fiscal Year (FY) 2022 through FY 2026, including $550 billion in new investments for all modes of transportation, water, power and energy, environmental remediation, public lands, broadband and resilience. Examples of funded projects include:
- Road, bridge and highway improvements
- Multimodal public transportation enhancements
- Seaport, ferries and waterway infrastructure
- Electric vehicles, buses and clean energy transportation
- Public safety and climate resilience
3. Inflation Reduction Act (IRA):
President Biden signed the Inflation Reduction Act of 2022 (IRA) into law in Aug. 2022. The bill includes $790 billion in revenue and savings to fund federal deficit reduction and approximately $485 billion in new spending, which includes some $385 billion in new energy and climate-related programs over 10 years and $100 billion to pay for a three-year extension of the Affordable Care Act healthcare premium tax credits. Some examples of funding opportunities for public sector entities include:
- $760 million for grants to state, local, and tribal governments, and other entities to support accelerated siting of interstate electricity transmission lines;
- $7 billion for use through September 2024 in competitive grants to states, municipalities, and tribes for providing grants, loans, or other forms of financial assistance, as well as technical assistance, to enable low-income and disadvantaged communities to deploy or benefit from zero emissions technologies, including distributed technologies on residential rooftops, and to carry out other GHG emissions reduction activities;
- $3 billion for Neighborhood Access and Equity Grants to reconnect communities divided by existing infrastructure barriers, mitigate negative impacts of transportation facilities or construction projects on disadvantaged or underserved communities, and support equitable transportation planning and community engagement activities;
- $1 billion to cover the cost of zero emission school buses, garbage trucks, and mass transit buses; and
- $1 billion for improving energy efficiency, water efficiency, or climate resilience of affordable housing. Public housing authorities can participate.
How Can We Help?
McGuireWoods Consulting has helped several clients harness federal funding totaling tens of millions of dollars since congressionally directed funding returned in 2021. Successful specific projects range from program expansions for a higher education institution, to significant infrastructure improvements for a large county government, to public safety improvements for a large development project.
Entities must submit funding requests to individual Congressional offices during the January – March timeframe to be considered for the congressionally directed spending process. Each office will have its own unique process and strategy for soliciting, approving, and submitting the Congressional Member’s “wish list” of projects.
This is a competitive process, and Congressional offices receive hundreds of requests. Funding requests most likely to succeed are those submitted early, strategically crafted to fit the political and policy landscape, and supported through sustained Congressional engagement.
In addition, competitive grant opportunities are being released now from both the Bipartisan Infrastructure Law and the Inflation Reduction Act. Members of our team have helped clients align Congressional support behind competitive grant opportunities available through these pieces of legislation.
Our team has also worked with local government clients to identify federal financing through loans and loan guarantees. In many cases, local government entities can receive sub-allocations from state governments. With offices in Washington, D.C., and across the country, our team is uniquely positioned to assist entities with securing such allocations.
Examples of Our Client Wins
- $10 million included the pending FY24 Appropriations Bill through the Congressionally Directed Spending (CDS) process;
- Successfully advocated for a $1.8 million competitive grant to support a county’s mental health facilities;
- Awarded a $3.5 million CDS Request for a water facility upgrade for a local government; and
- Matched the CDS Request Award to a state funding program that provided nearly $40 million for a community college system.