Whitmer's multi-billion dollar COVID-19 recovery plan sends money to schools, businesses

LANSING, Mich. - Gov. Gretchen Whitmer released an economic plan aimed at further propping up the state's economy and boosting operations in Michigan's public health, business and education systems.

The COVID Recovery Plan will target vaccine distribution, small business support, and increasing funds heading toward schools - a plan that allocates more than billions in federal and state dollars that partly come from unexpected revenue in 2020. Most of it has already been approved by Congress, but must be OK'd by the legislature.

The state's economic forecast returned less-than-bleak expectations for the next fiscal year, the state treasurer said during a press conference Tuesday afternoon. But the state is still hurting and without continued assistance from the federal government, economic burdens could persist for the next several years.

Whitmer's recovery plan would allocate $90 million for vaccine distribution, $225 million for small business support, as well as about $2 billion in federal and state dollars for Michigan's schools. 

"This is a plan to help our economy recover from the COVID-19 pandemic and help Michigan compete," State Budget Director Dave Massaron. "To make these investments even more valuable, the immediate action by the legislature to renew Good Jobs for Michigan is vitally important to drive more opportunity for our residents."

Most of the money will come from the federal government, which approved a $900 billion relief package in December. 

Recovery Plan: Public Health

• $90 million in appropriated funds from Congress to boost vaccine distribution rates around the state
• Funds will go to financial support to local health departments for administrative costs, staff increases, equipment upgrades. The aim is to vaccinate 50,000 residents a day.
• Michigan will also use another $575 million to expand COVID-19 testing, tracing, and lab capacity

Recovery Plan: Jobs and Economy

• Three programs housed in the MEDC, the Michigan Mainstreet Initiative, Michigan Microenterprise Support Initiative, and the Business Accelerator and Resiliency Initiative will guide $225 million to small businesses Michigan Mainstreet Initiative - helps industries secure grants for "place-based businesses" open Michigan Microenterprise Support Initiative - helps small businesses with nine employees stay open Business Accelerator and Resiliency Initiative - provides grants to high-tech startups
• Michigan Mainstreet Initiative - helps industries secure grants for "place-based businesses" open
• Michigan Microenterprise Support Initiative - helps small businesses with nine employees stay open
• Business Accelerator and Resiliency Initiative - provides grants to high-tech startups
• Money will be spent on food assistance for families
• Federal programs that approved money for rental assistance will be allocated to those unable to pay housing or utility costs due to the pandemic. 
• Funds will offer property tax assistance to landlords who couldn't charge for rent due to moratoriums on evictions

Recovery Plan: Education

• About $2 billion in funds, including $300 million in additional tax funds from the state, will go helping reopen schools for in-person learning by March 1. 
• "These one-time, flexible dollars will be distributed through a formula that recognizes the additional costs associated with supporting students in poverty and students with special education needs."

The most popular term budget officials would likely use to describe Michigan's economic future for the near-term is "cautiously optimistic" after a meeting last week between fiscal agencies and the treasury department. 

For Fiscal Year 2021, the budget has $1.2 billion more than what was predicted in August. That includes $700 million in the general fund, which goes to paying for prisons, state parks, higher education, and state police. The School Aid Fund has $528 million more than what was predicted.

State Treasurer Rachel Eubanks said on Friday the economic blow barreling toward Michigan was softened by federal stimulus packages that arrived as a result of the pandemic. She also said Michigan outperformed national averages in "a number of areas."

But factors like unemployment and a fall-off in tax revenue from income could burden the state for years as its rate of workers without a job is expected to exceed the pre-pandemic rate for the next several budgets.

Furthermore, even as several programs to fund small businesses hurt by the pandemic have been installed in recent weeks, restrictions on operations for industries like restaurants and concert venues could make the recovery slow.

Rep. Thomas Albert (R-Lowell), who will chair the House Appropriations Committee next session, warned before his committee will consider spending bills offered by Whitmer, the governor will need to loosen restrictions on the economy.

"I fully intend to employ the checks and balances required in our system of government. We will not simply hand over billions of taxpayer dollars to extend the current way of governing," he said last week.

Whitmer has chastized any decision to hold up funds for the state.

Furthermore, budget officials warned that public health should be the top priority for the state and until the pandemic is under control, the economy cannot recover.