Over the past few years, the United States has undertaken what many have described as a historic investment in infrastructure.
Billions of federal dollars have flowed to states. New programs have been created. Existing programs have been expanded. Announcements have celebrated the largest infrastructure commitment in a generation.
And yet, if you speak with city leaders—mayors, council members, public works directors, finance officers—you hear a different story.
They are struggling to keep up with maintenance. Road conditions continue to deteriorate. Long-term obligations are growing faster than revenues. Capital needs exceed capacity. Despite the scale of federal investment, many cities feel increasingly desperate just to keep up, let alone to make meaningful progress.
Those realities should not coexist. If large infusions of capital are strengthening the system, local governments should feel more stable, not less.
So, it is worth asking a difficult question: What if these two trends are not contradictory? What if the system we’ve built to fund transportation is contributing to the very desperation we expect it to relieve?
Last week, we released Mission Accomplished, a white paper outlining what we believe should follow the Interstate construction era. The core premise is straightforward: the national buildout mission that justified the modern federal transportation apparatus is complete. The federal role should narrow to stewarding the Interstate system, maintaining national safety standards, and coordinating disaster response. Gas tax revenues should flow largely to the states, and the dozens of federal transportation programs that currently shape state and local decision-making should be wound down.
The most serious pushback did not defend highway expansion. It came from local leaders who are already stretched thin and fear that removing federal involvement would leave them with even fewer tools. They face maintenance backlogs they cannot close. They inherit infrastructure they cannot afford to sustain. They operate within state systems that often prioritize capacity expansion over repair and safety.
In that environment, federal programs do not feel like distortion. They feel like capacity. They feel like leverage, sometimes the only leverage available. In some places, federal grants are viewed as the only counterweight to a state DOT culture still oriented around widening and speed. These programs have allowed cities to advance safer corridors, retrofit dangerous arterials, or pursue long-delayed improvements that might otherwise never rise to the top of the state’s agenda.
From that vantage point, narrowing the federal role can sound less like reform and more like retreat. If cities feel stretched and limited today—with federal support—how could they possibly feel stronger without it?
That concern deserves to be taken seriously. But it also requires stepping back and examining the structure that produced the current condition.
Local governments across the country are not struggling because they lack projects to build. They are struggling because, first and foremost, they are responsible for maintaining a vast and growing inventory of infrastructure whose long-term costs exceed its long-term returns.
That is not a moral failing. It is arithmetic. And it applies to states, as well.
For generations, the structure of federal transportation spending has encouraged states and cities to add to that inventory. The incentives embedded in matching formulas and eligibility rules consistently favor building something new over taking care of what already exists. Each project may have seemed justified at the time—congestion relief, economic development, modernization—but taken together, they have produced an infrastructure portfolio that is expensive to maintain and, especially now that the interstates are built, financially unproductive.
When obligations accumulate faster than the tax base that supports them, budgets tighten. Maintenance is deferred. Even smaller, incremental improvements are postponed. The system becomes more brittle.
In that environment, federal capital funding can feel like relief. It allows an otherwise impossible major project to move forward. It unlocks resources that local budgets cannot easily generate on their own.
But it also adds to the inventory. It expands the list of assets that must be maintained in perpetuity. It competes for local matching dollars that might otherwise address other needs. It channels professional and political energy toward navigating eligibility and compliance.
Over time, this dynamic creates a paradox: the more capital flows into the system, the more long-term obligations it generates. As obligations mount, local governments become more financially constrained,and increasingly dependent on the very capital that adds to those obligations.
This is what it means to say that bad spending crowds out good spending. Not because anyone intends it, nor because any particular project is wholly bad on its own, but because the structure rewards scale over return. Large projects are subsidized. Incremental repair is not. Expansion is visible. Maintenance is not. The big federal grant fits a format our institutions are comfortable with. The rapid-response intervention with paint and cones is more effective, but messy.
Changing that structure will not feel easy. But continuing it guarantees the same outcome.
None of this is theoretical. We see it playing out in communities across the country. Consider 4th Street in Brainerd, Minnesota, the street in front of my own home. It is a residential block carrying roughly 455 vehicles per day—less traffic than many alleys in larger cities—yet it has been engineered to function like a minor highway. The reason is not traffic demand or neighborhood preference, but funding eligibility.
To access federal dollars through Minnesota’s state-aid system, the city designated 4th Street as a connector between larger corridors, triggering design standards intended for high-volume roadways: wider lanes, faster geometry, and higher long-term maintenance costs. One block away, 5th Street—built without those requirements—functions as a calm neighborhood street. The difference is not local judgment; it is federal incentive.
A similar dynamic played out in Salem, Oregon, where the city received a $13.2 million federal RAISE grant toward a $28.4 million reconstruction and widening of McGilchrist Street, an industrial corridor carrying roughly 3,600 vehicles per day. To secure the grant, Salem had to commit $15.2 million in local funds, an amount that has risen substantially as the project has proceeded.
This was framed as transformative infrastructure, but even using the city’s own projections, the project never comes close to having a positive financial return. It literally makes the city poorer, robbing it of capacity to do other things. Yet, the structure of the federal grant rewarded scale, ambition, and co-investment, not financial return. A plan that would be rejected under a disciplined return-on-investment lens moved forward because the funding structure encouraged expansion over stewardship.
The same structural mismatch is visible on Buford Highway in metro Atlanta. It is one of the region’s most dangerous corridors, despite carrying heavy foot traffic and the system’s most productive bus route. What the corridor needs is not a single transformative capital project, but hundreds of small, incremental fixes: safer crossings, protected bus stops, better lighting, narrower turning radii. Yet, because Buford Highway is embedded in the federal-state highway system, the tools available are designed for scale and uniformity.
Federal funding tends to arrive in the form of large, multi-year reconstruction efforts—expensive, slow-moving, and politically fraught—rather than adaptable, bottom-up improvements. The presence of the distant big solution displaces the immediate small ones. Local leaders are pulled into compliance processes built for a different era, while the incremental changes that would immediately improve safety and productivity remain sidelined.
A version of these stories can be told in every American city. They are the natural outcome of a federal transportation system built for expansion, scale, and uniformity. That system can support reform at the margins, but it was never designed for stewardship. Good people have tried for decades to redirect it, but the structure has proven remarkably resistant to change.
This leads to the next serious question: would states really do any better?
The honest answer is that many will not, at least not immediately. State DOT culture in much of the country remains rooted in the expansion era. They are downstream from funding formulas, reimbursement schedules, design standards, and institutional relationships established over seven decades. That is a great deal of inertia to overcome.
But reform is more plausible when responsibility is distributed rather than centralized. It is easier to change fifty state institutions, each operating within its own political and fiscal constraints, than to redirect a single national apparatus built for a different era. We know there are reformers in state government—in both parties—who are already wrestling with the right questions. I’ve met with many of them.
Without federal mandates and incentives channeling capital toward legacy projects and large-scale expansion, states will have greater room—and greater necessity—to develop approaches grounded in local reality.
Better projects do not emerge from uniform national templates. They come from iteration, feedback, and proximity to the people who live with the results. If we want transportation investments scaled to neighborhood needs, the kinds of incremental improvements that actually make a place stronger, those practices are more likely to take root where authority and consequence sit close together.
That is the real shift we are proposing.
Not abandonment. Not austerity. Not indifference to safety or mobility. But a recognition that the era of expansion is over, and the era of stewardship requires a different alignment of authority and responsibility.
If federal transportation spending were making our communities stronger, local governments would feel stronger. They don’t. They feel financially stretched, operationally brittle, and increasingly dependent on chasing the next round of capital.
That should tell us something.
The question is not whether federal dollars have funded worthwhile projects. Of course they have. The question is whether the structure of that funding is aligned with the work before us. It is clearly not.
If your city feels broke at a time of historic federal investment, that is not a contradiction. It is a signal.
We can continue to rely on a system built for an old mission and hope it produces a new outcome. Or we can acknowledge that the mission has changed and allow our institutions to change with it.
The choice is not between help and hardship. It is between prolonging a structure that deepens local fragility and building one that makes our communities stronger.
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