Biden Stimulus to Provide a Windfall to Local Governments

The Biden Stimulus Plan, also known as the American Rescue Act, is expected to provide direct aid to local governments in Michigan. The total amount is estimated to be $130 billion nationally, with Michigan’s local governments sharing approximately $4.4 billion of this aid, according to reports in the Detroit Free Press and Bridge Magazine. The aid will be distributed according to a federal formula based on the population of each jurisdiction, and nearly every community in Michigan will be included. The State of Michigan will also receive $5.9 billion.

Cities, townships and counties must use the money by 2024, and the funds can pay for infrastructure upgrades, parks, downtown improvements, hazard pay for workers, etc. They cannot use the money to pay pension debts or provide tax cuts.

In some cases, the federal aid to locals will exceed 50 percent of the total current revenues of jurisdictions. Communities such as Benton Harbor ($10 million), Detroit ($890 million), Flint ($99 million), Jackson ($32 million) and Saginaw ($53 million) will see substantial aid compared to their local budget.

Mike Nystrom, MITA’s Executive Vice President, said that although the exact details of how communities will use the funding are still being worked out, the Stimulus Plan is welcome news for taxpayers frustrated with Michigan’s crumbling infrastructure. MITA will work with local governments to encourage them to use the funding for infrastructure upgrades.

Stay tuned to your MITA bulletins for details in the coming weeks.