A surge in federal infrastructure funding will boost NC’s economy. Where is it going? | Opinion

This new year will bring new money to North Carolina.

Lots of it.

Major legislation passed by Congress in 2021 and 2022 will send states a flood of revenue in the form of direct payments, tax breaks and grants. Over the next several years, the money will pay for bridges, road repairs, upgraded sewer and water systems, more clean energy and, finally, give more rural areas high-speed access to the internet.

Gerald Cohen, chief economist with UNC’s Kenan Institute of Private Enterprise, said the federal windfall will support overdue repairs and new construction around the nation and in North Carolina. “Unfortunately, we’ve built up this backlog of infrastructure needs,” he said. “We’ve underinvested in our physical plants and in resources to support people with things like broadband access.”

Cohen said the funding could be doubly important. Not only will it address long-neglected infrastructure needs, it will also provide an economic stimulus if rising interest rates slow the economy and raise unemployment. “It’s coming at a time when the economy could use a boost,” he said.

Most of the funding is provided by three major bills passed by Congress with backing from the Biden administration: the Infrastructure, Investment and Jobs Act (IIJA), the CHIPS and Science Act and the Inflation Reduction Act (IRA).

Gov. Roy Cooper’s office provided this partial breakdown of the amounts North Carolina will receive:

• $11 billion over the next five years from the IIJA, and potentially billions more in competitive grants from $45 billion still to be awarded.

• Under the IRA, North Carolina will get at least $10 billion in grants and subsidized loans, but that could go as high as $30 billion, depending on the state’s success in seeking grants and loans. The IRA, in many ways a clean energy bill, will provide the state with an estimated $2.7 billion to increase large-scale clean power generation and storage. One noticeable result will be a network of fast-charging stations along and near the state’s major highways that will make it possible to cross the state quickly in an electric vehicle.

• The CHIPS and Science Act will provide between $6 billion and $11 billion over the next five years to support scientific research, STEM education and investments in semiconductor manufacturing.

The rush of money should move projects delayed by their price. For example, the state announced this month that it has won a $110 million federal grant under the infrastructure law that will support a proposed $289 million project to replace a 60-year-old swing bridge that links Tyrrell and Dare counties along U.S. 64.

Expanding broadband internet access is another instance. The state, chipping away at the goal, committed $150 million to expanding broadband. Federal funding increased that amount to $750 million. Now the state expects that all households with school-age children will have high-speed internet access by 2026.

The state normally spends about $200 million annually on water infrastructure, but the federal funding will increase that to $2.3 billion over two years. Eighty six counties are getting extra money to improve their water systems.

So much federal money coming over several years will challenge the ability of state and local governments to channel and spend it. Smaller towns will need help seeking and properly using federal funds. The state will need more engineers to handle an increase in public projects. And it will be a challenge to find enough contractors for all the work.

But these are good problems. After years of failed attempts, serious work is getting underway to fix what hasn’t been maintained and build what has been postponed. Republicans complain about government overspending, but there’s a higher cost to underspending. This surge in repairs, construction and modernization of the nation’s infrastructure will ultimately generate more for the economy and the quality of life tomorrow than it will cost today.

Associate opinion editor Ned Barnett can be reached at 919-829-4512, or nbarnett@ newsobserver.com