How states could topple Biden’s Justice40 goals

Source: By Jean Chemnick, E&E News • Posted: Sunday, February 6, 2022

Detroit neighborhood near a refinery.

A neighborhood in southwest Detroit abuts a Marathon Petroleum Corp. refinery. Romain Blanquart/Detroit Free Press via AP

State officials could severely restrict President Biden’s promise to steer 40 percent of federal funding into communities of color that are shouldering the bruising effects of climate change, according to experts.

That’s especially likely to happen in Republican-controlled states.

Biden came into office last year pledging to redress historical inequities in investment and environmental racism by ensuring that disadvantaged communities would reap 40 percent of the benefit from “relevant” federal investment — a commitment his administration dubbed the Justice40 initiative.

And when Biden signed into law a $1.2 trillion infrastructure bill last year, it marked a historic infusion of public money into roads, bridges, broadband. and energy and water systems.

But as agencies across the federal government begin to announce their first outlays under the sprawling five-year bill, it remains unclear how many programs will meet the Biden Justice40 commitment, which directs two-fifths of benefits to communities that have been harmed by decades of underinvestment.

For one thing, Justice40 is a Biden administration commitment, not a feature of the bill that cleared the House and Senate last year with bipartisan support. In fact, when the legislation started moving through Congress last spring, the White House had yet to release its interim guidance for how Justice40 would be implemented.

That came in July. Now, seven months later, the White House and federal agencies are still hammering out details about what Justice40 means and what communities would benefit.

To be sure, the infrastructure law does recognize disadvantaged communities and areas of “persistent poverty” — defined by census data, not proximity to environmental hazards — as deserving of special consideration. In some cases, these communities are guaranteed a minimum share of competitive grant funding.

But competitive grants make up about 24 percent of the overall bill, according to an analysis by the Brookings Institution. More than three-quarters of the bill is allocated to states according to well-worn formulas that give the federal government little leverage to introduce new conditions — whether they be a preference for union labor or requirements for climate resilience or equity.

That applies overwhelmingly to the transportation dollars that make up the bulk of the bill. In total, the Department of Transportation will oversee $567 billion. While a chunk of that will go to grant programs that DOT has more control over, states will get more than $50 billion a year in formula-based highway funding.

This money will be deployed quickly and typically goes to projects that have long been in the construction pipeline, said Joseph Kane, a fellow at the Brookings Institution. The likely outcome, he said, is a “sugar rush” of construction at the state level rather than an opportunity for a national reckoning on how investments are made and who benefits from them.

“I think the pace and the political urgency to get the money out there — even on the part of the administration, because they want to have quick wins here where bridges are being repaired — will mean the money will be spent in the ways we’ve always spent it over the last few decades,” he said.

‘Kind of stuck’

While the administration’s control over this part of the infrastructure package is limited, officials from the president on down have weighed in with statements about how funding should be allocated — including on equity.

On Nov. 15, the same day he signed the Infrastructure Investment and Jobs Act into law, Biden issued an executive ordersetting “implementation priorities” for the funds, including “through the Justice40 Initiative.”

Administration officials have also sent memos, letters and guidance aimed at state officials who will have a hand in implementing provisions of the law. These encouraged states, municipalities and other partners to spend money on climate resilience and to benefit underserved communities.

In December, Federal Highway Administration Deputy Administrator Stephanie Pollack wrote a letter to state officials laying out an “overarching framework” for the types of projects that should get priority under the bill.

She proposed that they consider funding repair and maintenance of existing transportation infrastructure — including the addition of “resilience features” — ahead of expansions or new construction of single-occupancy vehicle infrastructure.

Jeff Davis, a senior fellow at the Eno Center for Transportation, called Pollack’s letter “very unusual” — especially given the administration’s relatively limited input in the highway portion of the bill, which was substantially written before Biden took office.

He said the letter seemed to attempt to resurrect language in the House version of the bill that was left out of the Senate version, which became law. The House language failed to garner support from Republicans.

The American Association of State Highway and Transportation Officials, which represents officials from both parties, responded to Pollack last month by reasserting the states’ role in identifying projects for funding. The group also pointed to strides that state agencies are making on climate change resilience and equity.

“Some of the red states really wanted to push back, the blue States didn’t, and AASHTO, the organization of all 50 state DOTs, is kind of stuck, trying to keep all its members happy,” said Davis.

Republican state officials have been blunter.

‘Excessive consideration of equity’

Pump jack in LA near apartments.
Apartment buildings are seen behind pumpjacks at the Inglewood Oil Field in Los Angeles in May. | AP Photo/Jae C. Hong

Mitch Landrieu, a former Democratic mayor of New Orleans whom Biden tapped to serve as his infrastructure czar, sent a letter to governors on Jan. 4 in which he proposed goals for the law. It cited “creating good middle-class jobs, supporting disadvantaged and underserved communities, advancing climate resilience and sustainability, and investing in American manufacturers.”

Sixteen GOP governors fired back with a letter to the president dated Jan. 19 demanding that the administration defer to states not only on formula funding but on competitive grant programs that federal agencies are responsible for administering.

“Excessive consideration of equity, union memberships, or climate as lenses to view suitable projects would be counterproductive,” the governors said. “Your administration should not attempt to push a social agenda through hard infrastructure investments and instead should consider economically sound principles that align with state priorities.”

The governors hinted at litigation if the administration tried to tie strings to federal funding. And they warned Shalanda Young, acting chair of the White House Office of Management and Budget, to write regulations for the infrastructure package that “defer to the states and confer maximum regulatory flexibility.”

OMB released a 465-page guidebook for the infrastructure law this week that mentioned climate 44 times and equity 41 times.

While GOP-led states have expressed skepticism about Biden’s environmental justice “lens,” other states have asked for more guidance.

Pennsylvania’s Department of Transportation in a letter to DOT asked for clarification about how infrastructure funding intersects with the Justice40 initiative and “how State DOTs can be sure to have clear pathways to dutifully invest to meet the target.”

But if the administration’s control of formula-based funding is limited, the amount of competitive grant money included in the package is substantial. That gives federal agencies ample opportunity to invest billions of dollars in the kinds of communities the White House plans to target under Justice40.

Did Biden leave highway money out of Justice40?

The White House says the infrastructure bill’s money will be spent in line with the president’s 40 percent commitment. That may be true in part because it is unclear if that pledge ever included highway infrastructure spending.

The Jan. 21, 2021, executive order that introduced Justice40 guaranteed that disadvantaged communities would see 40 percent of benefits from investment in areas including clean energy and efficiency, clean transit, affordable and sustainable housing, workforce development, remediation and reduction of legacy pollution, and clean drinking water.

While the bill’s funding in those areas is dwarfed by its investment in highways, it’s still significant. And much of it comes in the form of competitive grants that the Biden administration will have more control over and that can be awarded to cities and organizations without first passing through state government agencies.

Some investments have already been previewed, though Kane, of Brookings, cautioned that competitive grants will come out more slowly than formula-based allocations because they will require rulemaking and application processes.

The Interior Department announced that billions would be spent to clean up abandoned coal mines. Vice President Kamala Harris visited Milwaukee last month to tout the bill’s $15 billion investment in lead pipe remediation — funds that will likely benefit poorer communities.

And before a bridge collapsed in Pittsburgh last week, Davis of the DOT said Biden was expected to highlight funding the administration secured for reconnecting communities that in the past were bisected by highway construction.

EPA will administer more than $60 billion of the infrastructure law’s funding, according to an analysis by the National Association of Counties. An EPA spokesperson said the agency has six Justice40 pilot projects that will all receive funding from the package, including grants to states to improve drinking water, a program to reduce diesel emissions, and cleanup at Superfund and Brownfields sites.

Forty-nine Superfund sites have been identified for cleanup with infrastructure law dollars; 60 percent of them are located in “historically underserved communities,” the spokesperson said.

‘Not the people’s bill’

Through the Clean Water State Revolving Fund and Drinking Water State Revolving Fund, EPA provides capitalization grants to states based on a formula, but it has the authority to approve their plans. The infrastructure law provides $44 billion for the two programs.

In a Dec. 2 letter to governors, EPA Administrator Michael Regan said it’s a “top priority” to provide revolving fund capital to disadvantaged communities.

Regan, a former state official from North Carolina, referenced a recent trip through the South in which he “saw and heard firsthand the range of systemic barriers that low-income people and communities of color face in accessing federal infrastructure funding.”

He reminded the governors that revolving fund revenue can be issued as grants or fully forgivable loans to communities without the ability to repay them, and he urged states to “remove barriers” to disadvantaged communities.

Environmental justice advocates say they’re planning to lobby both Washington and state capitols to ensure that communities of color and low-income communities aren’t last in line for federal infrastructure dollars — as they have been so often in the past.

“It’s a ground game,” said Denise Fairchild, president of Emerald Cities Collaborative. “I see the work for Justice40 as an organizing project.”

She likened the outreach that advocates are planning to do at the state level to past campaigns to pressure reluctant GOP governors to accept expanded Medicaid dollars under the Affordable Care Act.

While the infrastructure bill affords disadvantaged communities some opportunities, Fairchild said the fact that a broader climate and social spending package remains stalled on Capitol Hill shows that Washington still has a long way to go on equitable investment.

“Look, the [bipartisan infrastructure bill] is not the people’s bill, OK?” said Fairchild. “It is designed for mostly cities, states and the construction industry. The people’s bill is the ‘Build Back Better’ bill,” she said, referring to a climate and social safety net bill that remains stymied in Congress.

Reporter Arianna Skibell contributed.

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