Photo: Hernando de Soto Bridge crossing the Mississippi River between West Memphis, Arkansas and Memphis, Tennessee. Photo Credit: Chuck Coker / CC
The Center Square [By Jon Styf] –
Tennessee’s interim Commissioner of Transportation Joe Galbato warned the $6.2 billion coming to the state via the Infrastructure Investment and Jobs Act (IIJA) is “not the windfall I think a lot of people think.”
Galbato said that is because the state’s current funding for road and bridge work comes from the $4.5 billion sent to the state from the Fixing America’s Surface Transportation Act (FAST) signed by President Barack Obama in 2015. The FAST funding was sent to states from fiscal years 2016 to 2020.
So the IIJA will bring $185 million more to Tennessee each year for the next five years than the current funding bill. That’s $46 million annually per region, Galbato told to Tennessee’s Financial Stimulus Accountability Group last week.
“I think you’re exactly right that a lot of people heard the big $6 billion number and thought that we were getting $6 billion of new dollars coming into the state when, in fact, it’s $50 million or so added to what we’re already getting now on a regular basis,” said Butch Eley, Tennessee’s commissioner of finance and administration. “There are some positive attributes to this that we can take advantage of.”
Galbato assumed the interim role in November when Gov. Bill Lee named former transportation commissioner Clay Bright to be the chief executive officer of the new Megasite Authority of West Tennessee, which will oversee the spot where Ford will build its $5.6 billion electric truck and battery campus on 3,600 acres of land outside of Memphis.
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Galbato said the bridge and road funds will come to the state in existing programs called the National Highway Performance Program and State Block Grant Program that are a lower percentage of the overall funds in the IIJA than they were in the FAST Act.
“What this tells me is that this IIJA values core programs a lot less than the FAST Act did,” Galbato said.
The funding included in IIJA that wasn’t in the FAST Act includes $139 million for carbon reduction, $88 million for electric vehicle infrastructure, $302 million for bridge rehabilitation and $158 million for Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (PROTECT).
Galbato said he is concerned infusions such as IIJA are not a stable and reliable funding mechanism and that the federal government is paying more out of the Highway Trust Fund than is coming in. He also cited a Congressional Budget Office estimate that this spending could result in $256 billion in projected deficits.
“Basically, the way we look at it is they’re just printing money in Washington, as we all know,” Galbato said. “They don’t have any access to a long-term sustainable solution.
“Anyone who has taken Economics 101 knows this is going to lead to some bad inflation.”
Galbato also said many of the rules to qualify for the new programs have not been released, and he is not certain Tennessee will qualify. Galbato said his team asked the U.S. Department of Transportation for a timeline for those guidelines and was told it would take time, not getting a definitive date.
“Our biggest problem is that a lot of the money in the IIJA is not in formula funding,” Galbato said. “It’s in the form of these grants that we have to spend money to apply for and most of the times you don’t get.
“Not trying to be a dark cloud in the whole thing. It is good to have some extra money, but financially it’s fraught with issues. We will spend the money and we will put it on the appropriate projects. “
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
