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IIJA Funding Primer: How to Maximize Impact and Prepare for Future Technologies

Federal building and a beautiful blue sky.

State and local governments now have a tremendous opportunity to make nearly every facet of their infrastructure future-ready.

State and local governments now have a tremendous opportunity to make nearly every facet of their infrastructure future-ready. With deteriorating physical infrastructure in many parts of the country and digital infrastructure that is increasingly under attack from nation-state actors, the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) provides a much-needed injection of resources to make state and local organizations more resilient.

IIJA is the largest and most comprehensive infrastructure bill in American history. Of course the primary focus is on building and maintaining physical infrastructure, such as roads and bridges. But state and local governments can also use this opportunity to make critical investments in artificial intelligence (AI) and cloud-driven solutions that optimize infrastructure management, drive business process automation, close the digital divide and increase cyber resilience.

To better position states and localities to fully leverage these funds and become more future-ready, this paper from the Center for Digital Government provides an overview of funding streams within IIJA — and outlines how governments can best put these dollars to use.


Broadly speaking, the IIJA can be divided into spending buckets that include surface transportation, transit, energy, water, broadband, environmental and cyber resilience.1

The bill makes several significant infrastructure investments, including:2

  • $1 billion in funding over four years for state and local governments to improve cybersecurity³
  • $7.5 billion to build out a national network of electric vehicle chargers
  • $17 billion for port infrastructure and waterways
  • $25 billion for airports
  • $40 billion for bridges
  • $50 billion to build the country’s resilience against climate-related natural disasters
  • $55 billion to expand access to clean drinking water
  • $65 billion investment in broadband to foster digital equity and expand access to reliable high-speed Internet to every American
  • $65 billion to upgrade the nation’s power infrastructure and invest in clean energy transmission
  • $66 billion in rail funding
  • $89.9 billion in public transit funding, including $39 billion in new investments to modernize transit systems
  • $110 billion in additional funding to repair roads and bridges and support major transformational projects

IIJA also encompasses some 40 federal funding programs that will be overseen by the Department of Transportation (DOT).⁴ Some of these initiatives include new programs such as the Airport Infrastructure Grant Program, the National Highway Performance Program, the Bridge Formula Program and the State Incentives Pilot Program, which is designed to fund projects that improve the health, safety, resilience and economic viability of communities.

This is a massive bill with multiple funding streams, each with its own deadlines, application processes and oversight requirements. Therefore, it’s critical for states and localities to identify their funding priorities as soon as possible.


IIJA funding is primarily divided in two ways: formula-based grants and competitive grants.

Formula Funding

The federal DOT distributes a portion of IIJA funding to state DOTs based on formulas established by Congress. State and local population play an important role in formula-based funding.⁵ Though formula-based grants are pre-determined and noncompetitive, municipalities must still apply for these funds in many cases. If an agency or municipality is unsure of the funds distribution process in their jurisdiction, they should contact their state DOT for more information about how to access formula-based grants.⁶

Competitive Funding

IIJA also includes several competitive grant programs, meaning that states, localities and other eligible public-sector organizations will have to compete with one another for funding. Some of the competitive grant programs include:

Rebuilding American Infrastructure With Sustainability and Equity (RAISE) grants: This $7.5 billion competitive grant program provides funding for local and regional road, rail, transit and other surface transportation projects. Projects will be awarded funding based on how well they advance safety, sustainability, equity, economic competitiveness, mobility and community connectivity.

Digital Equity Competitive Grant Program: This five-year, $1.25 billion discretionary grant program will support the implementation of digital equity projects. State agencies, tribal governments, nonprofits, community anchor institutions, local education agencies and public-sector workforce development organizations all are eligible to apply for funding.

Bridge Investment Program: This four-year, $12.2 billion competitive grant program supports projects that will improve bridge safety, reliability and efficiency. States and metropolitan planning organizations that represent an area with a population of more than 200,000; local and tribal governments; and special purpose districts or public authorities with a transportation function are eligible to apply for funding.

Megaprojects Grant Program: This $5 billion competitive grant program provides funding to support multimodal, multijurisdictional or regional infrastructure projects. Federal guidelines say “communities are eligible to apply for funding to complete critical large projects that would otherwise be unachievable without assistance.”

Agencies and government organizations that may be eligible for funding should take the time to read the federal government’s “Guidebook to the Bipartisan Infrastructure Law” for a list of competitive grant programs and information about the awarding agency that will administer each program.


State and local governments can put IIJA to work in several ways to drive infrastructure modernization, improve digital equity, strengthen security and accelerate their use of emerging technologies. Here are just a few use cases:

Infrastructure management

As states and localities modernize their physical infrastructure, they’ll also need to advance their technology capabilities to better support upgraded roads, bridges and transit systems. IIJA funding also covers the implementation and deployment of advanced transportation technologies, so governments should consider investing in asset and field service management tools and security solutions that help them gain more visibility into transit data, deploy these insights to improve mobility and transit safety, and better protect all the data they collect.

Smart cities

A portion of IIJA funding is dedicated to strengthening mobility and transportation efficiency. The bill provides funding across several programs that will enable municipalities to purchase and integrate Internet of Things (IoT) technologies to repair and maintain critical infrastructure and advance inclusive mobility options. Eligible investments include connected vehicles; intelligent, sensor-based infrastructure; and smart traffic technologies, among others.⁷

Digital equity

State and local governments want to ensure every resident has equitable access to the Internet. Advancing or kick-starting broadband build-outs that may have been stalled due to a lack of funding can better position states and localities to deliver affordable, high-speed Internet.

IIJA allocates $65 billion in funding across seven programs for exactly this purpose. The money can also be used to cover digital literacy, workforce development and device access programs, as well as broadband construction and other digital inclusion initiatives.⁸


$1.2 trillion in funding could transform how state and local governments manage both their physical and digital infrastructure. Though IIJA funding has specific allowable uses, it can help governments build momentum as they try to evolve into more technology-enabled, data-driven organizations.

This piece was developed and written by The Center for Digital Government Content Studio, with information and input from Microsoft.


  •, pg. 12.
  •, pg. 11
  •, pg. 79.
  •, pg. 387.