Inside208

Legislature Passes $4.7 Billion Budget Supplemental with Historic Investment for Michigan Communities

Posted on March 24, 2022 by Dene Westbrook

The Legislature has passed a $4.7 billion historic investment in our state which includes significant resources for communities large and small. This is nothing short of a significant victory for all in our great state. For months, we have talked about the potential opportunity to partners with the state and leverage their American Rescue Plan (ARP) funds with resources at the local level to amplify the impact and create shared prosperity. That day has arrived, and it is through these investments that our communities will continue to be the economic backbone of this state, drive growth, and increase our competitiveness.

We would like to thank the Governor and her team, Sen. Jim Stamas (R-Midland), and Rep. Thomas Albert (R-Lowell), for their leadership on Senate Bill 565 and commend them for working together to make this investment a reality. This is clear evidence of the amazing results that can happen when our leaders work together with a common focus and commitment on reviving and strengthening our economy, making Michigan an attractive place for talent, and supporting thriving communities in ways that benefit everyone.

Our members have been steadfast in their advocacy for investment at the local level. This legislation proves that our voice is being heard and making a difference. Governor Whitmer has signaled her support for this legislation and we look forward to her signing this historic legislation.

Below you will see a breakdown of the specific funds that were used in the supplemental and the key areas of investment. The icing on the cake was $46 million in constitutional revenue sharing hold harmless funds!

Total Investment: $4.709 Billion

  • $2.041 Billion State American Rescue Plan Fiscal Recovery Funds
  • $322 Million Local American Rescue Plan Fiscal Recovery Funds (NEU Allocation)
  • $961 Million Infrastructure Investment and Jobs Act
  • $250 Million Capital Projects Fund (ARP Funds for Broadband)
  • $571 Million State General Fund
  • $121 Million in Dedicated American Rescue Plan Funds (This is not State and Local Fiscal Relief Funds)
  • $383 Million in Covid Stimulus Funds (Pre-ARP Federal Stimulus Funds)
  • $60M in Federal Disaster Relief Funds

 

Highlights of Key Areas of Investment

Local Government

Non-Entitlement Coronavirus Local Fiscal Recovery Fund Grants – Second Tranche ($322 Million, ARP)

  • Includes $322.1 million federal Coronavirus State Fiscal Recovery Fund Star to distribute to local units of government pursuant to federally designated allocations.

Hold Harmless Revenue Sharing Payments ($46 Million, General Fund)

  • Allocates $46.0 million to be used to make hold harmless payments to cities, villages, and townships that experience a decline in population according to the 2020 census; requires payments to be made in an amount equal to the overpayment amount as described in the Glenn Steil State Revenue Sharing Act of 1971

 

Water Infrastructure

Water State Revolving Funds ($506 Million, IIJA)
Appropriates year one and two of five years’ worth of federal Infrastructure Investment and Jobs
Act (IIJA) funding to support loans and grants for the following:

  • Allocates $154.3 million to wastewater infrastructure
  • Allocates $88.2 million to drinking water infrastructure
  • Allocates $45.1 million to address emerging contaminants in stormwater and wastewater ($8.1 million) and drinking water ($37.0 million)
  • Allocates $138.8 million to replace lead service lines
  • Allocates $43.3 million to assist small and disadvantaged communities for drinking water infrastructure projects
  • Allocates $36.4 million in state general fund resources for year one and two of five years’ worth of state matching funds required to access IIJA funding

Water State Revolving Funds – Clean Water ($515 Million, ARP)

  • Allocates $515.0 million to be used for clean water infrastructure improvements and public health risk reduction efforts. The following specifics uses of these funds were included:
    • Authorizes the Department of Environment Great Lakes and Energy to hire 2.0 limited-term staff for clean water infrastructure improvements; requires the Department of Environment Great Lakes and Energy to maximize geographic distribution of funds by meeting certain requirements
    • Allocates up to $20.0 million for substantial public health risk grants capped at $2.0 million per project
    • Allocates $72.0 million to be used for priority wastewater infrastructure projects to address combined sewer overflows, pumping capacity, and sewer rehabilitation in Macomb County
    • Allocates $25.0 million to be used for the Great Lakes Water Authority

Water State Revolving Funds – Drinking Water ($750 Million, ARP)

  • Allocates $750.0 million to be used for drinking water improvements including lead service line replacements, water main improvements, and water treatment plant upgrades. The following specifics uses of these funds were included:
    • Authorizes the Department of Environment Great Lakes and Energy to hire 2.0 limited-term staff for drinking water improvements
    • Requires the Department of Environment Great Lakes and Energy to maximize geographic distribution of funds by meeting certain requirements
    • Requires at least a quarter of the appropriation, aside from specific allocations, to be used for lead service line replacement and PFAS remediation ($187.5 million)
    • Allocates $18.0 million to be used for the consolidation and contamination risk reduction program to provide drinking water assistance to remove or reduce PFAS or other contaminants including extension of water main to residential properties impacted by contamination in Iosco County ($8.6 million)
    • Allocates $45.0 million to be used for drinking water infrastructure improvements in Benton Harbor
    • Allocates $75.0 million to be used for lead service line replacement in Detroit
    • Allocates $5.9 million to be used for a water tower and backup system in Genesee County

Drinking Water Asset Management ($20 Million, ARP)

  • Appropriates $20.0 million federal Coronavirus State Fiscal Recovery Fund for grants to create asset management plans or distribution system material inventories for drinking water systems.

Healthy Hydration ($50 million, ARP)

  • Requires the Department of Environment Great Lakes and Energy to work with the Department of Education to purchase filtered drinking water stations or water filters to filter organic and manmade materials and chemicals from drinking water in schools and childcare centers located in areas of need
    • Requires schools to provide 50% matching funds

Michigan Water Use Advisory Council ($10 million, ARP)

  • Requires the Department of Environment Great Lakes and Energy to collaborate with the council to address recommendations included in the council’s 2020 report
    • Purpose of the program is to address recommendations included in the Michigan Water Use Advisory Council’s 2020 report

Dam Risk Reduction Program ($43.2 Million, General Fund)

  • Allocates $43.2 million for dam related projects
    • Allocates $15.0 million to be used by the Department of Environment Great Lakes and Energy for expenses related to permitting, inspection, review, and consulting for projects associated with flooding and dam management related to dam failure in May 2020
    • Allocates $28.2 million for dam risk reduction loans

Grants for Dam Projects ($206.8 Million, General Fund)

  • Allocates $200.0 million to the Four Lakes Task Force
  • Allocates $6.8 million to be used for lake dredging and a dam emergency spillway in Clare County

Failing Septic System Loan Program ($35 million, General Fund)

  • Allocates $35.0 million to be used for loans to provide low or no interest loans to municipalities, residents, and other entities to protect public health and the environment through addressing failing septic systems

PFAS Remediation Grant Program ($15 Million, General Fund)

  • Allocates $15.0 million be used for contaminated site remediation in Muskegon County
    • purpose of the program is for PFAS remediation activities at a former industrial site contiguous with Muskegon Lake with no viable ownership entity

 

Housing

Housing and Community Development Fund: Affordable Housing ($50 Million, ARP)

  • Allocates $50.0 million in funding be deposited into the Housing and Community Development Fund and be allocated to MSHDA to expand affordable housing for individuals disproportionately impacted by the COVID-19 pandemic

Housing and Community Development Fund: Middle Housing Gap Program ($50 Million, ARP)

  • Allocates $50.0 million to the Housing and Community Development Fund be used by MSHDA to create a Missing Middle Housing Gap program to increase the housing supply for households with incomes between 185% and 300% of the federal poverty level by helping defray the costs to nonprofit developers for investing in, constructing, or rehabilitating properties
    • requires that at least 30% of awards be allocated to projects in rural communities
    • requires that no more than 15% be allocated for projects in any single city, village, or township

Residential Clean Energy Improvements ($50 Million, ARP)

  • Allocates $50.0 million to MSHDA to incentivize energy efficiency and health improvements for single or multi-family properties and to provide energy assistance
    • Authorizes properties to be owner-occupied or rental properties
    • $10.0 million for rehabilitation of certain structural or mechanical repairs for both existing owner-occupied and rental properties
    • $20.0 million for activities that stabilize and enhance neighborhoods by nonprofits 501(c)3 agencies and local governments
    • $15.0 million to invest in and repair homes which will promote public health and safety in the City of Detroit
    • $5.0 million for a low-income energy assistance program administered by a non-profit in the City of Detroit

 

Broadband

Capital Projects Fund – Michigan Statewide Broadband Service Grant Program ($250 Million, ARP)

  • Allocates $250.0 million in funding to be used to provide competitive broadband infrastructure grants for the provision of broadband service in unserved areas
    • requires grant awardees to submit semiannual reports
    • requires that up to 5% of funding be used to operate the Michigan High-Speed Internet Office (MIHI)

 

Parks and Recreation

Local Parks Recreation and Trail Infrastructure Grants ($200 Million, ARP)

  • Allocates $65.0 million to be used for a local parks and recreation grant program
  • Allocates $60.0 million to be used for a recreational greenway in Detroit
  • Allocates $55.0 million to be used for a recreational greenway in Grand Rapids
  • Allocates $20.0 million to be used for the Northern Michigan Tourism and Sports Fund for facilities, sports-related tourism, and recreation in northern Michigan

State Parks and Trail Infrastructure ($250 Million, ARP)

  • Allocates $250 million to the Department of Natural Resources to develop, improve, repair, and maintain state parks, state recreation areas, and state-designated trails. The following specific use of these funds was included:
    • Allocates $30.2 million to be used to develop a state park in Flint at the department’s discretion

 

Roads, Bridges, Transit and Mobility

Road and Bridge Programs ($316.7 Million, IIJA Revenue Increase)

  • Appropriates $316.7 million in federal funds for the following:
    • $237.5 million for state trunkline road and bridge capital construction programs
    • $79.2 million for local federal-aid road construction programs
    • The allocation between state trunkline and local road programs is in accordance with provisions of Public Act 51 of 1951.

Public Transportation Programs ($66.2 Million, IIJA Revenue Increase)

  • Appropriates $66.2 million in federal funds for the following:
    • $41.0 million for transit capital
    • $9.8 million for rural area formula (nonurban operating/capital) grants
    • $7.7 million for service initiatives
    • $3.2 million for specialized services
    • $1.6 million for intercity bus services
    • $2.7 million for marine passenger program
    • $227,900 for MDOT transit program administration

Pump Station Back-Up Generators ($66 Million, ARP)

  • Allocates $66.0 million to support a statewide program for implementation of redundant electrical service for stormwater pumping stations serving state trunkline highways

Michigan Infrastructure Office ($5 Million, ARP)

  • Appropriates $5.0 million federal Coronavirus State Fiscal Recovery Fund to establish an office that will coordinate efforts across state department agencies and other federal and local partners to help ensure federal funding provided from the Infrastructure Investment and Jobs Act is used effectively and efficiently.

Mobility Futures Initiative ($25 Million, General Fund)

  • Allocates $25.0 million to the Office of Future Mobility and Electrification in LEO to coordinate investments in the mobility sphere and requires funding to be allocated as follows:
    • $15.0 million for transition and growing the state’s mobility workforce and industry
    • $7.0 million for safer, greener, and more accessible mobility services, which may include grant and pilot programs
    • $3.0 million to develop and commercialize mobility technologies through a new network of mobility innovation hubs

John LaMacchia is the League’s director of state & federal affairs. He can be reached at jlamacchia@mml.org or 517-908-0303.

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1675 Green Road,
Ann Arbor MI 48105
 
Capitol Office
208 N. Capitol Ave.,
1st Floor Lansing, MI 48933
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