If you want to know how public infrastructure projects are funded and approved in the United States, one part of the process has just been rewritten. In January 2026 the Council on Environmental Quality issued a final rule rescinding its regulations implementing the National Environmental Policy Act (NEPA). On 24 February 2026 the Interior Department rescinded most of its own NEPA implementing regulations. Agencies now write their own procedures or guidance. This is a US picture; the research behind this piece does not examine other countries in any depth.
What changed in 2026, and what is still unsettled
The administration frames the rescission as fixing a long-standing permitting failure through deregulation, according to the National Law Review. Critics read the changes differently. That is the administration's view, not an established finding.
Two other items are reported but unconfirmed. A funding-consultancy page citing Transportation for America gives 30 September 2026 as the expiry date for the main federal surface-transportation law, the Infrastructure Investment and Jobs Act (IIJA). The same page says a FY2026 spending law rescinded more than $2.3 billion in IIJA allocations. I have not verified either figure against the enacted law, so check the statute or the Congressional Record before relying on them.
CSG Midwest reported on 20 October 2026 that states are pursuing new revenue sources as gas-tax income falls. The same item says Nebraska's LB 1126 was signed in April 2026 and will essentially function as a state infrastructure bank. Details beyond the Nebraska law were not verified.
Who pays: the funding mix
Public infrastructure is funded and financed through federal, state and local government, primarily with taxes and user fees, according to a Harvard Kennedy School explainer. Bonds, grants, state loans and sometimes private capital supplement that base. Most projects combine several of these sources. Infrastructure Report Card notes that federal and state money typically cannot be the sole source of financing.
Public bodies can raise money through taxes in ways private firms cannot, but that power is limited by law, by public tolerance and by political competition, according to the bvop.org overview. The research does not support any percentage split between sources, so none is given here.
Brookings, in a secondary analysis, reports that much of the recent increase in state and local infrastructure spending comes from operations and maintenance rather than new construction.
Bonds and the public vote
A government bond is borrowing from investors, who are repaid principal plus interest over a set period. Whether a local project needs a public vote depends on state law and the type of bond. In California, bonds for cities, counties and special districts that are paid for through increased property taxes generally require approval from two-thirds of local voters, according to the Legislative Analyst's Office. That is a California rule. Check your own state and local requirements before assuming the same applies.
General obligation versus revenue bonds
General obligation bonds are backed by property taxes. Revenue bonds are repaid from project income. A commentary on citizenpost.net argues that revenue bonds offer more flexibility but less democratic oversight. That is opinion from a low-quality source, but it explains why voters often ask which type of bond is on offer.
Voter thresholds vary by state
Proposition 5 on California's 2024 ballot would have lowered the threshold for certain local bonds from two-thirds to 55%. The Legislative Analyst's Office estimated that an additional 20% to 50% of local bond measures would have passed under the lower threshold. This article has not confirmed whether Proposition 5 passed, so check the result before citing it.
Frontline Advisory Group, an advisory firm, says Delaware uses referendums almost exclusively for school district bonds, and that Western states tend to rely more on direct democracy. Its bond-count figures have not been checked, so they are not repeated here.
A local bond typically starts when a school board or city council drafts a proposal stating the amount, purpose and repayment timeline. The council adopts a resolution and, where law requires, places the measure on the ballot. Simi Valley's road and bridge bond records show this pattern.
Federal grants: formula versus competitive
Formula grants go to states or localities according to set criteria, such as population or mileage. Competitive grants are discretionary and scored against project merit, readiness and equity goals.
The BUILD programme, previously known as RAISE and TIGER, is a competitive example. According to the USDOT's FY2026 notice, it is authorised and appropriated at $1.5 billion a year under IIJA, and more than $18 billion had been awarded in 18 rounds to local recipients as of July 2025. An award is not cash in hand. Obligation occurs when the recipient and the Department sign a written grant agreement, after the recipient has met applicable local, state and federal requirements.
The research contains no data on how often small cities win these grants, so this article cannot say whether they do. Read the notice of funding opportunity for eligibility rules and scoring criteria before applying.
Environmental review before construction
NEPA applies to major federal actions, including federal funding, permits and regulations, according to the National Law Review. An environmental assessment (EA) can end in a finding of no significant impact (FONSI). Under FHWA and AASHTO guidance, if an EA shows no significant impact, a FONSI is prepared and no environmental impact statement (EIS) is required. A full EIS applies where significant impacts are found.
Review timing varies widely. A Widseth consultancy page says reviews typically take several months. A Nevada grant-programme guide gives a range of 1 to 120 days, depending on complexity. That guide describes one state's process and is not a national benchmark.
Public-private partnerships and state infrastructure banks
Public-private partnerships are often suited to airports, ports and toll roads, according to the Harvard explainer. The private partner typically receives a share of project revenue or other compensation, and revenue-sharing and availability-payment models vary.
State infrastructure banks are a different tool. The National Governors Association describes them as offering direct, low-cost loans and various forms of credit to public and private entities for transportation, energy, water and wastewater projects.
After approval, state DOTs typically contract out design, engineering and construction, according to a funding-consultancy page. A vendor glossary gives an indicative window of three to ten years for spending bond funds. Treat that as an estimate. The research does not show how it was derived.
What to check for your project
- Ask the agency which sources fund the project: local bonds, federal grants, state loans, fees or private partners.
- If bonds are involved, confirm whether your state requires a public vote and at what threshold.
- Ask whether federal money triggers NEPA review, and which tier the agency expects.
- Treat reported federal expiry dates and rescission figures as provisional until checked against the enacted law.