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Published in Economic Development
New Peters-backed law adds safeguards for Michigan metros once at risk of losing federal funds COURTESY OF U.S. CENSUS BUREAU

New Peters-backed law adds safeguards for Michigan metros once at risk of losing federal funds

BY Tuesday, December 06, 2022 03:45pm

Federal legislation that aims to protect certain metropolitan areas, including six in Michigan, from losing key federal funding has been signed into law.

The Metropolitan Areas Protection and Standardization (MAPS) Act, sponsored by U.S. Sen. Gary Peters, stemmed from a Biden administration proposal last year that would have changed the way Metropolitan Statistical Areas (MSA) are designated by the U.S. Census Bureau. 

The law will require the White House Office of Management and Budget to collaborate with federal agencies to study and disclose any potential effects of changes to MSA designations. 

The MAPS Act also extends the public comment period for proposed changes to standards and requires the White House to publish a report on the estimated effect on domestic assistance programs tied to any proposed changes.

MSA designations are closely tied to federal funding allocations. Peters crafted the bill after the Office of Management and Budget published a notice in January 2021 proposing to increase the minimum population for qualified MSAs from 50,000 to 100,000. 

While the White House withdrew its proposal last year, the rule change would have redesignated 144 U.S. Metropolitan Statistical Areas as “Micropolitan Statistical Areas,” which could have slashed federal funding for a variety of services.

The initial Office of Management and Budget proposal would have redesignated MSAs in Battle Creek, Bay City, Jackson, Midland, Monroe and Niles-Benton Harbor. The plan drew fierce criticism from local communities and municipal advocates who warned of far-reaching implications and funding losses. 

In addition to jeopardizing federal funds, the redesignation could have resulted in a loss of valuable data that MSAs use for economic development purposes, said Rob Cleveland, president and CEO of Benton Harbor-based Cornerstone Alliance

“I can’t tell you how important it is for those mid-size communities like ours to be able to continue to have access to that level of data,” Cleveland told MiBiz. “From an economic development standpoint, we really use that data daily. It’s all levels of data, whether it’s demographic, population data, education data — and it is specific to industry clusters and job classifications. It’s vital to really having an appropriate understanding of the local economy.” 

Metropolitan Statistical Areas must contain a U.S. Census Bureau-delineated urban area with a population of at least 50,000, while micropolitans are areas with populations of 10,000 to 50,000. The designations are used to classify key demographics in areas, such as unemployment or GDP levels, and determine how federal funding is allocated through programs such as community development block grants.

Every 10 years, the White House Office of Management and Budget considers updates to the standards to ensure their continued usefulness and relevance for federal agencies. 

“Untested changes to metropolitan area standards could put communities throughout Michigan at risk of losing access to vital federal resources,” Peters said in a statement following the signing of his bill into law. “This new law will ensure that the federal government carefully considers how changes to this classification may impact communities across the nation before they go into effect.” 

Cleveland also supports the MAPS Act provision to extend the public comment period for proposed changes.

“That public comment period the first time was very important,” Cleveland said. “There was a real collaborative effort throughout the state of Michigan to raise the level of importance when they discussed making the changes. So much is centered around MSA data that, to be excluded, would be detrimental to mid-size communities like ours.”

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