SBAM’s Budget Recommendations
April 27, 2023
SBAM, along with a coalition of business groups*, has issued the following recommendation related to the state budget and allocation of existing American Rescue Plan Act funds.
Michigan has yet to appropriate, or reprogram, approximately $1 billion in American Rescue Plan Act (ARPA) funds. Federal law sets strict deadlines for committing and expending these funds. Given the extensive federal requirements accompanying these funds, considerable time is required for recipients to actually expend dollars even after receiving them. In addition, the US House of Representatives is putting forward legislation to rescind unspent ARPA dollars. All of this adds up to great urgency to appropriate the remaining ARPA dollars on quality, existing programs that can spend the funds before the statutory deadlines. Simply put, we can invest once-in-a-lifetime federal resources in priorities like growing our talent pipeline and safe and affordable housing—and it’s use it or lose it.
Talent and Workforce:
Recommendation One: Use ARPA dollars to fully fund GoingPRO — $140M over 4 years (including FY22-23).
- We continue to advocate for GoingPRO – funded solely with GF and funded to meet ongoing demand ($100M+ per year). The previous budgets have included $65M, so we are requesting ARPA dollars in the amount of $140M ($35M annually for 4 years) to be used to fully fund the Going Pro pipeline and all current applications.
- GoingPRO, Michigan’s signature upskilling program is a turnkey talent asset, that delivers the talent businesses need and creates opportunities for advancement and higher wages for Michiganders.
- These funds could be leveraged to address specific industry disruptions (EV/AV, Industry 4.0, etc.)
Recommendation Two: Create Fast Track — $150m over 3 years
- Provide a one-stop shop for talent at the MEDC (Fast Track). We have an opportunity to provide a best-in-class business attraction and retention talent experience and provide individuals with a clear path to new jobs coming into the state.
- Flexibility and responsiveness required. Several job training programs exist in Michigan; however, expertise is scattered across organizations, and they do not have the flexibility and responsiveness required to meet the needs of business attraction and retention projects.
- The MEDC needs to facilitate tailoring job training to meet businesses’ specific needs. This will require funds to assist in identifying talent, building industry-aligned programs, and supporting higher education assets tailored to business needs.
Recommendation Three: Michigan Reconnect expansion to age 21-24 — $140M over 3 years
- Expand the Michigan Reconnect program to grow job and economic opportunity for adults across our state and help us outpace our competitor states.
- Lower eligibility from 25 to 21 years-of-age and make additional reforms/best practices to increase career counseling, college completion and persistence with one-time dollars.
Recommendation Four: Create a Near Completer Fund — $50M over 3 years
- Michigan has one million residents with some college and no degree, including 15,000 individuals who need fewer than fifteen credits to complete a 4-year degree.
- Provide funding to allow $5.5K scholarships to students and require that students have earned at least 90 credits previously, were not enrolled in a university in the last 12 months and must complete the degree within 24 months.
Recommendation Five: Scale STEM Forward internship program — $50M over 3 years
- Expand this comprehensive internship program that works to cultivate an early relationship with talent and provide work experience in key sectors – and has resulted in significantly better talent retention outcomes.
- Ensure small and large businesses utilize internships that are compelling, challenging, and innovative to retain and attract talent.
Recommendation Six: Zoning & Land Use Grants for Municipalities — $10M over 3 years
- Create grants for cities, villages, and townships to cover the costs associated with land use policies, master plan updates, zoning text amendments, and similar actions to encourage increasing housing supply and affordability and can attach to MEDC Redevelopment Ready Communities to reduce administrative burden.
- A cap on grant size is recommended to ensure access to more communities.
Recommendation Seven: Affordable housing — $200M over 3 years
- Supplement projects that have received Low Income Housing Tax Credits (LIHTC) from MSHDA but that are stalled because inflation has raised their construction costs while the credit amounts have remained static.
- Appropriating another $200 million will unlock thousands of affordable housing units for Michigan’s most vulnerable residents.
Recommendation Eight: Additional investment for “missing middle” — $100M over 3 years
- This support for workforce housing provides necessary gap funding for housing that is rent and income-restricted to be affordable to the median family.
- Critical to a comprehensive and balanced housing strategy, workforce housing is a key component of solving Michigan’s labor supply challenges and helping small businesses across the state.
Recommendation Nine: Safe and Healthy homes — $150M over three years
- Improve Michigan’s aging housing stock. Homeowners in rural and urban low-income communities often have high home equity or own homes outright but struggle to maintain safe, healthy, and energy efficient homes. These funds would help access federal funds and provide a wealth creation tool for urban and rural households.
- Support existing homeowners-in-need; these funds promote public health, improve housing values and neighborhood conditions, and create wealth for low-income homeowners.
- The federal Infrastructure Investment and Jobs Act provided $3.5 billion investment in home weatherization/energy efficiency—but many Michigan homes are ineligible for these funds because they have a leaky roof or old electrical wiring. Investments in Safe and Healthy homes mean that more low-income Michiganders will be eligible for federally funded energy efficiency upgrades.
*Coalition Members: Business Leaders for Michigan, Detroit Regional Chamber, Grand Rapids Chamber, Michigan Chamber of Commerce, Michigan Manufacturing Association, Small Business Association of Michigan