Stimulus Funds For Michigan

By Aram Kalousdian | September 28, 2010

Under the American Recovery and Reinvestment Act (ARRA) of 2009, Michigan will receive approximately $847 million in highway and bridge funding, according to the Associated General Contractors (AGC). The state will also receive approximately $168 million for wastewater projects. This is welcome news for our industry and Michigan citizens who depend on the state’s infrastructure.

Another breakdown by urban areas in the state shows how much highway funding urbanized areas with over 200,000 in population will receive. Detroit will receive approximately $100 million in funding under the legislation; Grand Rapids will receive approximately $14 million; Flint will receive approximately $9 million; Lansing will receive approximately $8 million; and Ann Arbor will receive approximately $7 million.

For all infrastructure investment in the legislation, the goal is for 50 percent of the funds to go to projects that can begin no later than 120 days after the date of the bill’s enactment. All projects funded under ARRA must be either under contract or under construction within 12 months of the date of enactment of the legislation.

AGC has provided an analysis of the economic impact of stimulus investment in Michigan.

  • An additional $1 billion in nonresidential construction spending would add about $2.3 billion to the state’s Gross Domestic Product (GDP), about $754 million to personal earnings and create or sustain 20,000 jobs. Approximately 6,800 of these jobs would be on-site construction jobs located within Michigan. Approximately 3,200 of these jobs would be direct and indirect jobs associated with construction supply materials and services. The majority of these jobs would be located within the state, but there would be some out-of-state jobs supported. Approximately 10,000 of these jobs would be created when construction, supplier and service providers spend their incomes. These jobs would be based in Michigan and throughout the economy.
  • In 2007, a total of 297,000 jobs were supported by the direct and indirect outlays associated with the state’s nonresidential construction spending.
  • The construction industry (residential plus nonresidential) employed 136,000 workers in December 2008, a decrease of 76,100 (35.8 percent) from June 2000, when construction employment in Michigan peaked.
  • Nonresidential construction spending in Michigan totaled an estimated $14.6 billion in 2007.
  • This direct construction spending in the state contributed a total of $33.7 billion (8.8 percent) to state GDP of $382 billion.
  • Direct construction spending in the state added $11 billion in additional personal earnings to the benefit of Michigan residents working in the state.
  • In 2007, annual pay of all construction workers in Michigan averaged $49,000, 13.5 percent more than the average for all private sector employees.
  • Michigan had 25,000 construction firms in 2006, of which 94 percent were small businesses employing fewer than 20 workers.

The numbers speak for themselves. Investment in Michigan’s infrastructure will make a significant impact on the state’s economy and will put our crumbling infrastructure in good condition. The stimulus legislation is only temporary funding meant to stimulate the economy, but it is surely needed and welcome. We still need a more permanent fix for our infrastructure funding problem. That’s something that our elected leaders need to deal with in short order.

Our elected representatives in Lansing should not become complacent with the stimulus money coming from Washington, D.C. They still need to fulfill their responsibilities to adequately fund infrastructure in this state. Efforts to increase transportation funding in Michigan failed in 2008 and those efforts have been renewed with the new state legislature this year. Many new legislators will have to be educated about transportation funding needs. The Michigan Infrastructure & Transportation Association (MITA) has been a leader in this effort. It’s time for the state legislature and the governor to step up to the plate and make things happen.