Michigan is set to receive funds from the federal government. Totalling 11 billion dollars, the funds are coming from President Joe Biden’s American Plan that was passed back in March. The funds would help the state and cities recover faster from the Covid-19 pandemic.
Here’s how the funding would break down:
$6.54 billion would be going to the state government.
$826.7 million would go to the city of Detroit.
Wayne County will receive $339.8 million.
Oakland County will get $244.3 million.
Macomb County is set to receive $169.8 million out of the Treasury funds.
An addition $1.8 billion would be going to the cities directly, The Detroit News reports, “Those slated to get the largest awards through the relief fund are Detroit with $826 million, $94.7 million for Flint, $92.3 million for Grand Rapids, $52 million for Saginaw, $49.9 million for Lansing and $47.2 million for Dearborn, according to data from the Treasury Department.”
Local governments are the key to rebounding from a recession. Gene Sperling, the rescue plan coordinator at the White House explained that one of the things that slowed down recovery during the Great Recession was the contraction of local governments. With these funds, cities and towns will be able to allocate resources and get back on track after the pandemic crippled their budgets last year.
For instance, officials in Detroit estimate that the Covid-19 pandemic cost the city more than $410 million in revenue last year.
And giving the funds directly to local governments should aid in the recovery process because they will know how best to allocate the money, as different places need different things, “Treasury officials stressed the flexibility they're allowing in the use of the direct aid, saying it may be used for public health needs, such as setting up emergency medical or vaccination sites; supporting small businesses that are struggling; water, sewer or broadband infrastructure; or providing aid to households with food or housing shortages.”
Also much of the money going to local governments will be used to rehire people laid off last year and forced cities to shut down. It could also possibly be used to bolster salaries of people deemed essential workers like those that live in nursing homes, as well as warehouse workers and shipping centers.
There are some restrictions on what localities cannot do with the money. Cities cannot add the money to their pension fund. Also, they cannot use it as a form of tax relief, nor are they allowed to keep it in a rainy day fund, or bolster the city’s reserves. The Treasury made it clear. These funds are to be put to work and not add to the city’s coffers.
Michigan should be receiving the first part of the funds sometime this May. There will be a second round of payments later in the year.