Business leaders: Michigan needs stimulus spending plan 'to transform our state'
Six major Michigan business associations have sent letters to state policymakers, calling on them to take the time needed to assure the funds are used to shape Michigan's future.
The letters sent this week come as Michigan is poised to receive $10 billion in direct aid to the state and local governments from the $1.9 trillion COVID-19 relief package passed last month.
The American Rescue Plan Act also provides millions more in other federal funding, including an estimated $4 billion for emergency school aid in Michigan and possibly tens of billions more in competitive dollars. Much of the money comes with few restrictions and doesn't expire until 2024, the business leaders noted.
"The main question now is: will we seize this singular moment to help Michigan emerge from the COVID-19 pandemic stronger — or will we look back years from now only to realize a significant opportunity to transform our state was squandered?" the associations wrote in a letter to Gov. Gretchen Whitmer.
The governor's office did not immediately respond to a request for comment. The associations also sent letters to legislative leadership and municipal leaders.
Business Leaders for Michigan, the Detroit Regional Chamber, the Grand Rapids Chamber, the Lansing Regional Chamber, the Michigan Manufacturers Association and the Small Business Association of Michigan sent the letter, encouraging politicians to work together across party and jurisdictional lines to assure the funds have lasting impact.
Calling it a "once-in-a-generation" opportunity, Jeff Donofrio, CEO of Business Leaders for Michigan, says wise investment of the funds can make a difference for the state over the next decade in workforce skills, income and entrepreneurship.
"Michigan has struggled since the Great Recession to even get above average in recovery," Donofrio said. "We look at these dollars that have the ability to invest in people, systems and be not just a one-time investment but help them to be more competitive and have higher incomes. That would be some of the best returns that Michigan could see."
The letter lacked specific policy recommendations, but emphasized six points. One is making investments "transformational," which Donofrio likened to a family saving for college or a business investing in new, more efficient equipment. Such efforts should seek to surpass other states in education, business competitiveness and available jobs, but not create the necessity for more taxes and unfunded mandates.
That's especially important for small businesses, many of which have faced a challenging business environment over the past year, said Micah Babcock, director of government relations for the Small Business Association of Michigan.
"The breadth of funding is honestly unprecedented," Babcock said. "This money is the pathway to Michigan's future for the next 10 years on. We want to be in a position to lead and for people to come to Michigan and start a business."
Also important are infrastructure investments for roads, bridges and dams as well as increasing the Michigan Unemployment Trust Fund, Babcock said. It is down to roughly $600 million from $4.6 billion in January 2020, when it had the third-largest balance in the country. The state ran out of money for the jobless during the Great Recession, forcing it to borrow from the federal government and passing on hundreds of millions in additional costs to employers.
"We want to shore up that account," Babcock said, "to prevent that automatic tax on businesses that have been hurt by this COVID-19 crisis."
The associations also request assistance for individuals and businesses in applying for competitive funds and the creation of measurable goals to provide transparency on how the money is spent.
They want to identify all options available to fill pandemic-induced funding gaps. The city of Detroit has reported more than $410 million in revenue losses related to COVID-19 over a 16-month period and stands to receive $879.59 million from the legislation. Mayor Mike Duggan declined to comment on the letter.
"We wanted to get on record early and clearly that this is really a unique and a once-in-generation opportunity," said Sandy Baruah, CEO of the Detroit Regional Chamber. "It is imperative we spend this money wisely in the benefit of the long-term economic interest of Michigan."