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Divvying Michigan's share of stimulus: It will take a while

Date Posted: March 13 2009

LANSING – Michigan is in line to get about $7 billion in federal stimulus money, but it’s probably going to take months to figure out how it’s all going to be spent.

The state’s construction industry will eventually be prime beneficiaries of the money. The most definitive information available is that $847 million will be earmarked for road and bridge repairs in Michigan – and that’s money that can be spent relatively soon.

But longer term, Michigan is still sorting out where and how other portions of the stimulus will be spent. Inquiries are directed to the state’s official website, which said last week: “Once decisions are made about which projects will best help us achieve our goals – creating jobs, spurring economic growth, and helping Michigan families – we will share that information with you here.”

Mike Crawford, executive director of the Michigan Chapter of the National Electrical Contractors Association, acknowledged that at least initially, the road builders would be the prime beneficiaries of the federal dollars. “We’re going to be looking at how the plans unfold over the next few weeks,” he said. “We know there’s going to be money available, for example, to improve energy efficiency in public buildings, schools, city halls, DPWs, etc. We just haven’t been able to get our hands on any figures.”

Michigan AGC President Bart Carrigan pointed to “a surprising amount of water and sewer construction,” as well as unexpected money for high-speed rail that President Obama inserted in the spending bill at the minute. “Overall,” he said, “there’s not nearly as much as we would like to have seen, but it still looks to be a significant amount. At the moment, most what we’ve heard is anecdotal stuff and lots of rumor.”

Michigan Gov. Jennifer Granholm said on the state’s stimulus website that the wish list from local communities to fund various projects “was overwhelming.” There were more than 16,000 requested proposed projects totaling more than $49 billion. “The size and scope of this request list demonstrates that there are far more needs in Michigan than the recovery plan can fund,” the state report on the stimulus money said.

On the list is everything from boiler replacement in an Addison County elementary school to installing energy efficient lighting in a Zeeland public works building.

President Obama said on March 3 that two weeks after he signed the $787 billion American Recovery and Reinvestment Act into law, “we are seeing shovels hit the ground” – although not very many of them. He said the $28 billion from his economic recovery program that’s being spent on road and bridge work will save or create 150,000 jobs by the end of next year.

“Transportation projects that were once on hold are now starting up again as part of the largest new investment in America’s infrastructure since President Eisenhower built the interstate highway system,” Obama said. Long-term, Obama expects his economic recovery plan to save or create, 400,000 jobs will be targeted toward rebuilding the nation’s infrastructure – roads, bridges, schools, levees, dams, and commuter buses and trains.

The Michigan Infrastructure and Transportation Association said the stimulus money will “provide a boost to Michigan’s heavy construction industry.” But the association added: “MITA has been clear in saying that the one-time stimulus is no replacement for a long-term, stable funding source. The association continues to call on state legislators to immediately address the chronic shortage of money for the transportation budget and provide new dollars to cover the unmet needs for municipal water and sewer systems.”

Part of the difficulty in nailing down spending is that states are given some latitude in how to spend the money. Spending on Medicaid and the state’s schools will eat up about $4 billion of Michigan’s $7 billion in stimulus money – but some of that school spending could include construction and renovation work.

Here is some of what we know about Michigan’s portion of the stimulus money:

  • Without putting a price tag on the work, the Michigan web site said a portion will provide funding sufficient to modernize at least 383 schools in Michigan, to add and improve labs, classrooms and libraries.
  • On March 4, Granholm announced that communities that submitted sewer and drinking water infrastructure projects last spring and summer in anticipation of receiving low-interest loans for repairs this year will be among the first eligible to receive the federal funding. The stimulus money is expected to provide $168.5 million and $67.5 million respectively for sewer upgrades and drinking water improvements in Michigan this year.
  • According to the Engineering News Record, Michigan is also in line to receive $134 billion in “transit capital.”
  • $279 million for “weatherization” work.
  • 43 million for public housing.
  • More than one million jobless workers will be offered an additional $100 per month in unemployment insurance benefits, and benefits will be offered to an additional 162,000 laid-off workers.
  • Provided will be a “making work pay” tax cut of up to $800 for about 95 percent of Michigan workers, designed to pay out immediately into workers’ paychecks.
  • The first $2,400 of unemployment compensation will be excluded from gross income in 2009. This exclusion will reduce taxable income for Michigan taxpayers on both their federal and state tax returns. The exclusion will save Michigan recipients of unemployment compensation up to $104 on their Michigan returns.
  • Across all industries, the recovery package is estimated to retain or create 109,000 jobs in Michigan.
  • Nationwide, the bill authorizes an additional $1.6 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities.

The bill also authorizes an addition $2.4 billion of qualified energy conservation bonds to finance state, municipal and tribal government programs and initiatives designed to reduce greenhouse gas emissions. None of the money in these categories is state-specific at this time.