Michigan lawmakers approve $4.8B for water infrastructure, broadband, housing aid

Lansing — Michigan lawmakers approved Thursday a $4.8 billion spending plan that they described as "monumental" and "historic," designating federal money to improve infrastructure, protect drinking water quality and provide rental assistance.

The House voted 95-7 for the main bill of the package before the Senate voted 34-3 on a deal the GOP-controlled Legislature and Democratic Gov. Gretchen Whitmer reached late Wednesday. The proposal had been debated for months in a state that's been grappling with water contamination for years.

"Everyone in Michigan realizes our infrastructure needs improvement," said House Appropriations Committee Chairman Thomas Albert, R-Lowell. "This plan allows us to do more to protect drinking water, improve our roads and parks and much more.”

The House Appropriations Committee moved the main bill to the full House chamber shortly after 10 p.m. Wednesday. It contains $4.7 billion in spending with about $4 billion coming from federal programs, while a smaller bill had over $100 million. The full House and Senate signed off on the bill on Thursday afternoon, sending it to Whitmer's desk.

The massive supplemental features as its centerpiece nearly $2 billion to improve drinking water and water infrastructure. That money includes funds targeting the replacement of all the remaining lead lines in Benton Harbor and other communities as well as money to battle forever chemical contaminants called per- and polyfluoroalkyl substances or PFAS.

About $1.3 billion is for wastewater, stormwater and drinking water infrastructure improvement projects, $50 million for purchasing drinking water filtration devices for schools and child care centers, and $35 million for loans to address failing septic systems.

In an election year, lawmakers and Whitmer's office have battled over the use of the state's remaining billions of dollars in general fund surplus, American Rescue Plan Act dollars and federal bipartisan infrastructure funds.

"These are tough times for families, small businesses, and communities, and this bipartisan supplemental will help grow our economy, create jobs, and invest in every region of our state," Whitmer said in a Wednesday statement. "I look forward to signing this supplemental when it reaches my desk and continuing in this spirit of collaboration to pass another balanced, bipartisan budget that delivers on the kitchen-table issues.” 

After the spending plan is enacted, about $2.7 billion in American Rescue Plan state fiscal recovery funds, those federal dollars the state has discretion over, will be left, according to the state Budget Office. 

Whitmer has proposed a record $74 billion budget plan for next year that includes tax cuts for seniors and increased exemptions for low-income earners. Republican lawmakers responded with a $2.5 billion tax cut plan for the personal income tax, increased exemptions for retirement income and a $500 child tax credit that Whitmer vetoed last week. 

While the Legislature has yet to propose its own annual spending plan, Wednesday's mid-year supplemental bill was negotiated with Whitmer before the Legislature next week begins a two-week spring break.

Albert indicated Wednesday that negotiations were at times held up by disagreements over the use of the one-time federal cash infusion, with Republicans advocating for one-time uses of the money. 

"We didn't want to create new government positions," he said, adding that some added positions in the spending plan were term-limited. Albert said he was most proud of the funding put toward water infrastructure projects.

"I kind of look at it as, if the federal government is going to mortgage our children's future, let's at least provide this funding in a way that's going to offer them some type of return in the future," Albert said. 

How money is allocated

Nearly $300 million will be invested in repairs at high-risk dams and flood recovery, with a majority of the money, about $250 million, focused on the fallout of failed dams in Midland and Gladwin counties. 

About $380 million will go toward roads and bridges, including $66 million for freeway pump stations that were a cause of Metro Detroit flooding last summer. Another recreation and tourism spending item would give $250 million to state parks and recreation areas, and $200 million to local community parks. 

About $88 million is targeted at "legislatively authorized projects" or what critics call pork spending. Among the spending items that were listed:

• $60 for recreational greenways in Detroit, $55 million for such greenways in Grand Rapids, $65 million for a local parks and recreation grant program and $20 million for the Northern Michigan Tourism and Sports Fund for facilities, sports-related tourism and recreation. 
• $25 million for the Wayne County Airport Authority.
• $10 million to build the Detroit New Center Intermodal Facility, a "combined intercity bus and passenger rail" facility, in the New Center area of Detroit.
• $4 million for a freeway sound mitigation project on I-75 in Oakland County.
• $2.2 million for Grand River/Telegraph road resurfacing project in Wayne County.
• $2 million to the Capital Region Airport Authority in Lansing.
• $1 million for a freeway sound mitigation study on I-75 in Wayne County.
• $500,000 to the Michigan International Technology Center.
• $350,000 for a Southfield M-39 service road sidewalk project in Oakland County. 

The supplemental budget includes about $500 million for rent and mortgage assistance, $322 million in local fiscal COVID relief, $100 million to develop "middle housing" options such as townhouses or duplexes and $50 million for home repairs. 

Another $250 million will focus on expanding broadband access and $25 million to make natural gas and other low-carbon energy more readily available.

What separate bill funds

A separate supplemental also gained the approval of the House and Senate Thursday with about $140 million to fight unemployment fraud and stabilize the unemployment insurance trust fund. That appropriation was part of the overall budget deal. Under that bill, $29 million would go toward improving administration and fraud enforcement in the Unemployment Insurance Agency.

Michigan's jobless aid agency lost more than $8.5 billion to suspected fraudulent payments amid record claims and persistent attempts at fraud during the COVID pandemic, according to a report issued in late December. 

Sen. Aric Nesbitt, R-Lawton, called the overall legislation approved Thursday a "historic infrastructure bill."

"I have been a strong advocate for leveraging our state’s one-time federal funding to make generational improvements to our roads, bridges, water systems and other necessary infrastructure," Nesbitt said. "By spending these dollars wisely, we will benefit Michiganders for decades to come."

Macomb County Public Works Commissioner Candice Miller also hailed the overall legislation, saying it would bring $72 million to help finance major infrastructure projects that would improve water quality and reduce the risk of future sewer collapses, sinkholes and basement flooding.

The opposition votes primarily came from conservative Republicans.

Rep. John Reilly, R-Oakland Township, said on Facebook the plan picked winners and losers.

"Monies are allocated to certain projects in certain areas of the state, such as $20 million to the Northern Michigan Tourism and Sports Fund, and $55 million for a recreational greenway in Grand Rapids," Reilly wrote.

The deal between the governor and Legislature comes after months of disagreement over the possibility of using the state surplus to offset a tax cut, a debate that will continue even after Wednesday's agreement.

The Legislature has supported a gas tax suspension, income tax rate reductions, increased deductions for seniors and a child tax credit. Whitmer has thrown her support behind an increase to the Earned Income Tax Credit, a retirement tax repeal benefitting some seniors and the suspension of sales tax on gas. 

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