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Where US State and Local Governments Will Be Spending Money in 2022

US Local Government Spend
Submitted by Connie Heath on February 10, 2022

Where US State and Local Governments Will Be Spending Money in 2022

As the state, local and education (SLED) market continues its recovery at the beginning of the 2022 calendar year, it’s important for businesses providing services to the government to understand how the market is performing and where it’s headed.

GovWin’s team of SLED market analysts recently released a report, the 2022 SLED Government Contracting Forecast, which can help contractors gain a window into current SLED market conditions. Below are some of the key findings from that report that may indicate which areas are ripe for opportunity, in particular, related to two major acts of government funding – the American Rescue Plan Act and the Infrastructure Investment and Jobs Act.

An area many government vendors are focused on has been the American Rescue Plan Act. At the state and local level this act is expected to allocate roughly $220B of coronavirus fiscal recovery funds to flow down to state and local government agencies. A significant portion of this money will be allocated to the 50 states (and the District of Columbia) but some will also be directed to municipalities, along with approximately $129B that has been made available for the K-12 Education Stabilization fund.

The recent Infrastructure Investment and Jobs Act should also provide significant funding for state and local projects across a variety of industry areas. Several of the major areas of SLED infrastructure investment in the next five years to come out of this bill are expected to include:

  • $110B for roads and bridges
  • $66B for rail
  • $65B to close the broadband gap
  • $55B for clean water and to eliminate lead pipes
  • $46B to mitigate floods, wildfires and droughts
  • $42B for air/sea ports
  • $39B for mass transit
  • $28B for electric grid infrastructure
  • $7.5B for e-vehicle charging

While much of the money is allocated for the construction of critical physical infrastructure like roads, bridges and rail, a significant amount will impact “smart” products and services as well, including the latter two of the items listed above.

  • Electric grid infrastructure (a critical part of powering cities’ technology offerings) will receive nearly $30B of funding over the next five years.
  • E-vehicle charging measures are expected to receive an additional $7.5B of funding in the same time period.

Generally speaking, it will take a more predictable, stable economy – and continued progress with the pandemic - to help state, local and education entities feel safe enough to hire back missing staff and return to previous patterns of procurement. And as that process continues to develop over 2022 and beyond, areas like E-vehicle charging and electric grid infrastructure may be areas of opportunity for businesses willing to partner with states and municipalities on newly funded projects.

Nick Schiffler is a business-to-government (B2G) market analyst and content marketer for GovWin from Deltek. Follow them on Twitter and LinkedIn and stay up to date with the latest government market insights.