What the $1.9 Trillion COVID-19 Relief Package Means for MichiganMarch 11, 2021
What does this bill mean for the broader economy and Michigan? The Chamber breaks down some highlights.
Key Provisions for Businesses
- There is nearly $30 billion in aid to the hard-hit restaurant industry, in the form of grants equal to the pandemic-related losses up to $10 million.
- The legislation expands the employee retention tax credit designed to allow companies to keep workers on the payroll. Businesses can claim a refundable credit equal to as much as $7,000 per employee per quarter.
- There is an additional $7.25 billion for the Paycheck Protection Program (PPP); however, the legislation did not extend the application deadline beyond the current end date of March 31.
- There is a $15 billion grant program for small businesses in low-income communities. Eligible companies must have no more than 300 employees and can apply for a grant up of up $10,000 by showing a loss of 30% revenue during an eight-week period from March 2, 2020, through the end of this year.
Key Provisions for Michigan
- Governments throughout Michigan will receive just over $10 billion, including $5.65 billion direct to the State of Michigan and local governments sharing $4.4 billion. Nationally, $350 billion has been allocated for state and local governments. These funds are intended to fill budget shortfalls and mitigate economic harm from the COVID-19 pandemic.
- Cities in Michigan will receive $2.5 billion in aid, with $1.8 billion of that going to cities in the Detroit metro region. The City of Detroit will receive $879.6 million.
- The bill includes a formula that accounts for poverty rates and population size in their allocation. Detroit’s $879.6 million appropriation is the fifth-largest for any U.S. city, behind New York ($4.33 billion), Chicago ($1.98 billion), Los Angeles ($1.35 billion), and Philadelphia ($1.1 billion).
- Counties in the Detroit region will receive relief allocations including Wayne ($339 million), Oakland ($244 million), Macomb ($169 million), Genesee ($79 million), Washtenaw ($71 million), Livingston ($37 million) St. Clair ($30 million), Monroe ($29 million), Lenawee ($19 million), Lapeer ($17 million), and Shiawassee ($13 million). Crain’s Detroit Business provides a complete database of how much federal relief 1,500 counties and municipalities are receiving.
- Local school districts in Michigan are expected to receive about $3.5 billion, including Detroit Public Schools Community District ($980 million), Flint schools ($120 million), Dearborn ($104 million), and Grand Rapids ($91 million). That funding will help schools safely reopen or address lost learning and the most vulnerable students’ needs.
- The state will also receive additional allocations from separate provisions in the bill for funding higher education institutions, transportation, vaccines, and COVID-19 testing, as well as rental and mortgage assistance and child care subsidies.
Important Additional Provisions
- The bill extends the $300 per week jobless aid supplement and programs making millions of more people eligible for unemployment insurance until Sept. 6. The plan also makes an individual’s first $10,200 in jobless benefits tax-free.
- The bill sends $1,400 direct payments to Americans and their dependents. The checks start to phase out at $75,000 in income for individuals, with a cap for people making $80,000. For married joint filers, the income limits are double the individual amount.
- The plan puts about $20 billion into COVID-19 vaccine manufacturing and distribution, along with roughly $50 billion into testing and contact tracing.
- The legislation increases the child care tax credit from $2,000 to $3,000 annually for children ages 6-17 and $3,600 for children under age 6.
The Chamber will continue to provide insight into what the bill means for Michigan businesses and residents and keep our members updated on the latest governmental actions.