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Published in Economic Development
Gov. Gretchen Whitmer surveys an I-94 bridge in Jackson last month that’s being repaired under the state’s Rebuilding Michigan bonding initiative. Gov. Gretchen Whitmer surveys an I-94 bridge in Jackson last month that’s being repaired under the state’s Rebuilding Michigan bonding initiative. COURTESY PHOTO

Biden plan could provide major funding influx for Michigan infrastructure plans

BY Sunday, April 11, 2021 05:00pm

President Biden’s recently proposed $2.25 trillion infrastructure plan comes as state officials and local planning experts make gains in plotting investment needs across Michigan.

Last month, the Michigan Infrastructure Council announced a new online portal that tracks where and when projects including utilities, roads and water and sewers will take place. It’s part of a broad attempt to coordinate hundreds of public and private entities planning more than 10,000 infrastructure projects across Michigan in the coming years and decades.

“We’ve all known there has been a disinvestment over the last couple of decades in infrastructure. Our state certainly has suffered from that,” said John Weiss, chairman of the Michigan Infrastructure Council and executive director of the Grand Valley Metropolitan Council.

With so many infrastructure projects in the queue — ranging from road repairs to sewer replacement to broadband internet — state officials say a roadmap is critical to avoid overlapping or duplicative projects. For example, the project aims to address the question of whether utility distribution infrastructure could be replaced while a road is torn up.

The Michigan Infrastructure Council’s “dig once” portal launched in mid-March and already has more than 10,000 planned projects statewide. It’s the latest in an ongoing attempt to “maintain a long-term emphasis on infrastructure and changing the culture in Michigan,” Weiss said.

American Jobs Plan

After a years-long focus on infrastructure spanning several governors, Michigan officials are now examining a concrete federal proposal, albeit one that’s subject to change. 

Biden’s American Jobs Plan includes more than $600 billion for roads, bridges and highways; $85 billion for public transit; $174 billion for electric vehicles and charging infrastructure; $100 billion for high-speed broadband internet; $100 billion to invest in the power grid; and $300 billion to invest in the manufacturing supply chain. 

Following Biden’s announcement, Amtrak issued a map of proposed projects that included potential enhancements to commuter rail between Grand Rapids and Chicago, as well as new routes connecting Detroit to Toledo and Detroit to Toronto. 

Biden’s plan also calls for $45 billion to replace U.S. lead pipes and service lines and $10 billion to monitor and remediate per- and polyfluoroalkyl substances (PFAS) in drinking water.

“Anytime you can bring more construction activity in a community like ours it will have a huge benefit for communities,” said Ryan Bennett, business manager for the West Michigan Plumbers Fitters and Service Trades Local 174 and president of the West Michigan Building Trades Council. He cited the former Obama administration’s American Recovery and Reinvestment Act of 2009 for helping to spur construction at an LG Chem battery plant in Holland.

“We’re anticipating shovel-ready projects like that looking for federal funding to push it over the edge,” Bennett said. “We’ve been neglecting investments in wastewater, sewers and potholes. (The Biden plan) calls out the replacement of lead service lines — that’s going to be a lot of plumbing and pipefitting work.”

Weiss said local and state governments and private entities that own infrastructure have spent years identifying needs and, just as importantly, how to pay for them.

“If more funding becomes available, more projects can be done off those lists at a faster rate, which will help us to avoid some problems we had in the past of waiting too long or waiting for a crisis,” Weiss said of the Biden proposal. “To get on top of this planning curve is part of the reason that whatever money becomes available, it will help us to move faster to what we know are already identified needs.”

Business apprehension

Funding Biden’s $2.25 trillion remains clouded with uncertainty. The administration proposes to increase the federal corporate income tax rate from 21 percent to 28 percent. The rate was reduced from 35 percent to 21 percent four years ago during the Trump administration. 

The tax increase already has generated strong opposition from GOP leaders and apprehension from some key Democrats, who hold slim majorities in the U.S. House and Senate.

Based on initial feedback from its members, “There’s a little bit of concern about how much is being lumped in there, but mostly going away from user fees and raising the corporate income tax hasn’t been well received,” said Joshua Lunger, senior director of government affairs with the Grand Rapids Area Chamber of Commerce.

Lunger said the Grand Rapids Chamber is “typically pro-infrastructure,” but favors funding models based on user fees over tax increases.

“We need to do something,” Lunger said of infrastructure projects. “We’re very supportive of the idea of infrastructure investments, but so far there’s just a lot of questions and concerns over the methodology of generating revenue.”

Lunger added that raising corporate income taxes in the wake of a now year-long pandemic  runs counter to economic recovery efforts. Bennett and other supporters of the Biden plan are skeptical of business groups’ stance.

“The argument that it’ll somehow cost us jobs or be a negative for the economy hasn’t really proven to be the case,” Bennett said of raising corporate income taxes. He also noted that his personal taxes increased after former Trump administration policies. “The money’s got to come from somewhere.”

In remarks last week, Biden said he’s “open to good ideas and good-faith negotiations” with GOP opponents, but noted that “inaction simply is not an option.” Democratic congressional leaders have said they hope to move the plan later this summer or fall.

Although business groups are opposed to the corporate tax increase to pay for the infrastructure, Weiss said the business community is “reacting positively” and becoming more closely involved in the Michigan Infrastructure Council’s work around a project roadmap.

While federal funding details and project priorities are still unclear, any potential plan would leave it to public planners to “use whatever funds we can in the most efficient manner,” Weiss said.

“Any effort that takes place at the federal, state or local level to get on top of this infrastructure crisis we’re currently facing will help us as a country be more stable in the future,” Weiss said. “It’s a need that’s been out there. It’s very expensive, but it’s also very expensive to do nothing.”

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