States Are Leveraging Financing Institutions to Strengthen Infrastructure

Independent authorities help communities plan, pay for, and manage long-term capital needs

PEW

Authors: Fatima Yousofi and Logan Timmerhoff

July 16, 2026

As the historic federal funding provided under the 2021 Infrastructure Investment and Jobs Act begins to taper off, state and local governments—which own or operate most of the nation’s public roads, bridges, and water systems—face growing pressure to sustain the investments that began with those federal dollars and manage ongoing maintenance costs.

But this isn’t just a funding problem. Infrastructure responsibilities are fragmented across thousands of local governments with varying levels of fiscal capacity and expertise. And in many cases, states bear the fiscal and economic consequences—through spending on emergency aid, regulatory compliance, or disaster recovery—when locally managed roadway and water assets fail. Infrastructure outcomes depend not only on how much money is available, but also on whether states and localities can coordinate effectively on planning, prioritizing investments, and managing assets across systems.

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