Connecting state and local government leaders
A leading consultancy is backing the Biden administration’s idea that states should have a lead person to help navigate programs in the new infrastructure law.
With a wave of new public works funding coming from the federal government, the Biden administration earlier this year urged governors to designate point people to oversee their states’ efforts to tap the money and make sure it is well spent.
Now, an influential group of consultants is throwing their support behind the idea that states should select infrastructure czars, or “coordinators.” The recommendation comes from McKinsey’s Public & Social Sector Practice, which noted that the $1.2 trillion infrastructure law that President Biden signed last year is larger and more complex than previous programs of its kind.
“While the [law] presents new funding opportunities, it could also present many challenges for states—all of which may build a case for installing a steady infrastructure coordinator at the helm,” the McKinsey authors wrote.
States and localities will get the lion’s share of money from the Infrastructure Investment and Jobs Act, but getting large sums of the funding won’t be automatic. Sixty percent of the money will be handed out using formulas in the law, but the remaining 40% will come from competitive grants, loans or other federal programs.
Having so much money up for grabs adds a new layer of complexity for state agencies, the McKinsey experts warned. Many of the programs are new and “require municipal governments, public and private project sponsors, state agencies, and utilities to be the direct applicants,” they wrote.
“Officials will likely need to navigate a complex set of approvals and stakeholders to deliver new builds and upgrades, all while integrating innovative technologies and managing cost with strained supply chains and the new Buy America requirements,” the McKinsey authors continued.
The law sets out 110 competitive funding programs, along with more than 700 new or revised statutory deadlines, the report noted.
The amount of funding available could dwarf what state agencies – and the people they serve – are used to. For example, McKinsey pointed out, the Drinking Water State Revolving Fund will receive $30 billion in the next five years. That’s more than the $25 billion the fund received over the previous 25 years combined.
A state infrastructure coordinator can help state agencies stay on top of, and even to meet, the many deadlines set out by the law, the McKinsey experts said. That’s especially important for agencies that have been underfunded in the years since the Great Recession.
The czar could also help states roll out new projects more thoughtfully, the consultants said.
“Lack of coordination between state and local agencies could result in situations such as a street being dug up one year for lead pipe replacement, only to be torn up again the following year to lay new fiber optic cable. Infrastructure may be built at a project level, but the sum of all this construction can be disruptive to communities,” they explained.
The infrastructure czars could also keep projects on schedule, and let the public know how those projects are going. The point person could also coordinate the deployment of hard-to-find construction materials and make sure there are enough of the right kinds of workers available to do the jobs that are coming up, the McKinsey experts said.
A designated leader could also help communities that have traditionally been overlooked in federal grant programs get access to some of the new money, which is a major focus of the Biden administration as it rolls out the law, they added.
“Approaching the competitive grant and funding process with a strong, trusted leader at the helm could help governments and organizations navigate complex, fast-moving application processes,” they wrote.
The authors of the report were Justin Badlam, Aaron Bielenberg, Sara O’Rourke, Adi Kumar and Rob Dunn. A copy of it can be found here.
Daniel C. Vock is a senior reporter for Route Fifty based in Washington, D.C.