(WXYZ) — “When you’re talking 2 trillion dollars that’s mind-boggling,” says Bill Anderson, Financial Specialist for the Southeast Michigan Council of Governments.
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“It is a lot of money, but there are a lot of issues to deal with, especially for a lot of the communities other than the city of Detroit, they did not receive any direct assistance in the first CARES package,” says Anderson.
Most Michigan cities still hadn’t bounced back from the recession before the pandemic hit, many with revenue levels still below 2009 levels. In Lincoln Park a city that was under Emergency Management just a few years ago, there’s a chance the pandemic could reverse the progress.
But still … more than $20 million dollars was unexpected.
“We thought there was a typo,” says James Krizan, the city manager for Lincoln Park.
The city’s annual budget is 23 million dollars, the stimulus money is nearly doubling their money.
“Kind of like you do when you’re playing the lottery, you think of all the things you’d like to do with it,” says Krizan adding there are many things the city needs.
Port Huron’s stimulus check is nearly as big.
“Our first thought was, wow, that’s a shocking amount,” says James Freed, Port Huron’s City Manager.
The city’s Tax Revenue in 2020 was 15.85 million.
They are scheduled to receive 19.59 million in stimulus.
“To put that in perspective,” says Freed, “this has actually eclipsed our entire general operating revenue for about a year.”
The city of Detroit will get $879.59 million in stimulus money which is roughly 88% of this year's operating budget of 1 billion dollars.
While that is a lot of money, experts say, it is needed.
“This is going to be a lifesaver for a lot of governments who are hurting financially,” says Eric Scoresone t the Michigan State University’s Center for Local Government.
In addition to the extra costs of the pandemic, Detroit lost 71 million dollars in income taxes alone in 2020 and Scoresone says that is just the beginning.
“If people continue to work remotely, some cities could lose income taxes permanently,” says Scoresone saying Detroit and Lansing are both experiencing this.
Other sources of revenue are down, from fines and tickets to parking.
Clinton Township may owe nearly 1 million dollars just for the district courthouse. They have 15.24 million to spend and will be looking for the best ways to spend it.
The city of Ferndale lost 1.5 million in 2020 in parking fees alone, but will only receive 2 million in stimulus money.
“For most of the communities they are going to be receiving about 105$ per person,” says Anderson.
Anderson says there are about 35 cities receiving large sums of money. The amount calculated loosely using a Federal formula for community development block grants.
Lincoln Park is grateful to have options. The city’s sewage system and other infrastructure are in dire need of an upgrade. Before this stimulus money, it would have taken 20 years to replace lead pipes, now projects can potentially be tackled sooner with less tax burden on the residents.
The city of Port Huron has a community center with a leaking roof that has needed replacing for years in addition to roadwork and other infrastructure needs.
Many will be looking to invest in broadband internet. Some will just be off-setting the costs of the pandemic.
Municipalities have 3 years to use all the money.
“When this much money is dumped into the local economy,” says Freed, the stimulus could impact project bids.
“A lot of our projects are coming in 5 to 10 percent higher because of the demand and we are concerned about cost escalation,” says Freed.
There are also concerns about whether we will end up paying for this stimulus package in the long run.
“I am not sure we have the luxury to be concerned,” says Scoresone.
“Sometimes you have to make decisions that are necessary to keep the economy going now, I think that’s the world we are in at the moment,” says Scoresone.
He adds that it is important residents get involved in their local government to influence how this money is spent.
