Michigan business leaders want stimulus money spent to drive sustainable growth

(The Center Square) – Michigan’s leading business associations have called on government leaders to use the incoming billions the state will receive in federal stimulus dollars to fuel long-term, strategic growth.

The $1.9 trillion American Rescue Plan (ARP) signed by President Biden lets state government spend the one-time funding through 2024.

“COVID-19 has resulted in unprecedented challenges in our state and it’s critical that we make the most of the federal stimulus dollars that Michigan has been allocated,” said Brian Calley, president of the Small Business Association of Michigan, said in a statement. “If used effectively, these dollars can help Michigan rebound from the economic, health and educational gaps the pandemic created.”

Six business groups sent a letter to Gov. Gretchen Whitmer, legislative leadership and municipal leaders, asking them to prioritize six principles in spending the money.

Focus on Transformational Investments: prioritize long-term goals and leapfrog other states in education, fostering business competitiveness.Maximize Michigan’s Share of Stimulus Dollars: Specific federal funding streams and programs address many of the economic, health, and educational gaps created by COVID-19.Protect Flexible Funding and Target Uncovered Gaps: Flexible funds should fill uncovered COVID health, educational and economic gaps only after other sources are exhausted.Prioritize Leverage and Avoid Unfunded Mandates: Investments that leverage private and public sector dollars to achieve larger goals and provide ongoing returns should be encouraged. Investments must be sustainable and avoid creating reoccurring tax burdens for our residents and businesses. Prevent Backsliding: Access to these stimulus dollars should not work against the gains we have made.Measure Outcomes and Assure Transparency: There should be clear goals and metrics identified and measured, with programs designed to allow for adjustments based on this data. Transparency into where and how the funds are spent is essential.

The letter states: “There will be many ideas for spending these one-time dollars and an inclination toward doing so quickly. Our organizations strongly urge leaders to take the time needed to assure these funds aren’t simply spent, but are used effectively in transforming Michigan into a better place to live, work, and play.”

Despite 10 years of economic growth following the Great Recession, Michigan has struggled to recover economic benchmarks, including household income, educational achievement, and economic growth trailing most states. The leaders urged these one-time funds to be spent on long-range investments that spur businesses’ growth.

Roughly $51 million is going to Lansing,

“It can be easy to find ways to spend one-time funding on short-term needs, but far harder to find investments that will transform our state in the next decade,” Jeff Donofrio, president and CEO of Business Leaders for Michigan, said in a statement. “Michigan’s goal shouldn’t just be returning to pre-pandemic status: this is an opportunity to both help our state recover from COVID-19 and advance long-term, widely shared prosperity. We know states and regions across the country are planning strategic investments that will give them even more of a competitive edge for jobs and economic growth in the coming years – Michigan can’t be left behind.”

Roughly $879 million is allocated to Detroit.

Detroit Regional Chamber President and CEO Sandy Baruah said: “The American Rescue Plan is a once-in-a-generation opportunity for Michigan to advance our state’s economic competitiveness responsibly. It is imperative that leaders in Lansing strategically use the money to support communities, businesses, and people without new taxes or unfunded mandates that would create impediments to sustained growth.”

Roughly $95 million is allocated to Grand Rapids.

“Policymakers must use these one-time funds to crush the virus, mitigate the impacts of the pandemic on our businesses and communities and set the stage for future success,” Rick Baker, president and CEO of the Grand Rapids Area Chamber of Commerce, said in a statement. “Expenditures should be carefully considered for maximum, measurable and long-term impact, while avoiding the creation of unfunded, ongoing obligations or liabilities.”

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