By SHELDON KRAUSE
Capital News Service
LANSING — More than a year into a COVID-19-related economic recession, a third major federal relief package is set to provide funding for Americans directly and to some local governments for the first time.
How will the American Rescue Plan help some of Michigan’s smallest communities, those with fewer than 5,000 residents?
The legislation signed by President Joe Biden will deliver $1.9 trillion in coronavirus-related relief, spread mainly among direct payments to individuals, extended unemployment benefits and make-up for lost state revenue.
Michigan will receive over $10 billion going directly to state and local governments. The state will receive $5.65 billion, while local governments will receive up to $4.4 billion, according to Crain’s Detroit Business.
A Crain’s Detroit Business analysis said Detroit will receive nearly $900 million directly, the 5th-largest amount of any city in the nation.
At the low end are small municipalities. For example, the village of Blissfield will receive $383,105, the city of St. Ignace will receive $229,369 and Manistee Township will receive $402,655.
The Crain’s Detroit Business database of how much Michigan communities will get uses data from the U.S. House Committee on Oversight and Reform and a formula based on population size, poverty rates, growth and other factors.
Dan Gilmartin, the CEO of the Michigan Municipal League, praised the bill for including smaller communities that had been left out of previous relief efforts.
“This will be the first time that governments of all sizes get directly funded in this manner since the 1970s, something we worked really hard on to make sure that all communities get direct funding. The CARES (Coronavirus Aid, Relief and Economic Security) Act that passed last year only went to larger communities,” he said.
“Now there’s like 19,000 local governments across the country that will be funded by this. So that’s a huge win for the smaller communities who have typically been left out a lot of this type of legislation,” he said.
Gilmartin also talked about how smaller communities may benefit from the direct funding.
“It provides some economic stability for them and allows them to continue to provide those core base-level services for people and for businesses in the community,” he said.
“I think it’s going to give them a chance to look forward a little bit and, in some cases, even think about investing some of this money back into the community to make sure that that particular area is recovering the way that it can,” Gilmartin said.
He added, “Our goal was significant, flexible funding for all units of government regardless of size. And we achieved that with this package.”
According to U.S. Census estimates, there are nearly 1,200 townships and cities in Michigan with under 10,000 residents – and over 1,000 of them have fewer than 5,000 residents.
In general, in areas with close-to-average poverty and unemployment rates, local governments will receive $100 for every resident.
For example, Harbor Springs, a city with a permanent population of 1,158, is set to get a similarly proportioned $118,000 in aid.
Victor Sinadinoski, the city manager of Harbor Springs, said, “From the city perspective, we haven’t sought out any federal money for any assistance with anything going on through the pandemic, either from the federal (government) or state.
“But I know a lot of businesses have taken advantage of the federal relief and state relief programs to keep the cost of their operations at least partly covered.”
Sinadinoski said, “We would probably spend the money for both general improvements and COVID related issues. Of course, any expenditures of significant money would have to be approved by (the) city council.”
“However, for COVID issues, we could look into making our outdoor public spaces more accommodating for public gatherings. This could include putting up more seating and tables, hand wash stations, and improved/attractive outdoor gathering areas for people to socialize.
“We may also use it for some minor retrofitting of city buildings to ensure our staff and visitors are as safe as possible.”
Tom Keerl is the deputy treasurer Harrisville, a city of 425, that is set to receive just over $46,000.
“To give you a clue, if that was anywhere near close – our current budget for 2021 is $200,000. If we were to get $46,000, you’re talking about increasing our budget by a quarter,” he said. “That would be huge.”
“We have a lot of sidewalks we’d really like to do,” he said with a laugh. “We have a playground that we are having all kinds of problems with.”
Keerl added, “We are surviving – this would be over and above. This would be a windfall to be able to do some of these other projects that are out there that we’re struggling to be able to accomplish.”