Financial Background

The City of East Lansing has and continues to face significant, long-term budget challenges as a result of:

Many steps have been taken over the years to address the City’s challenges, including:

Despite these steps, the City’s financial challenges have persisted and the City Council has proposed this income tax as an option for new revenue to maintain quality services to the community, invest in aging infrastructure and prevent additional, deep cuts to areas such as public safety (which makes up 64.8% of the City’s general fund expenditures) and parks, recreation and community events (which makes up 9.8% of the City’s general fund expenditures).

In the face of the City’s ongoing financial challenges, the East Lansing City Council appointed a Financial Health Review Team in 2016 tasked with looking at the overall financial health of the City and considering new revenue options. The team, comprised of residents and non-residents with backgrounds in government finance and other areas of expertise, worked over the course of 2016 to review City data, review the data of other Michigan cities and Big Ten university communities, commission studies/reports (including an Income Tax Feasibility Study by Plante Moran), engage with the community and, ultimately, come up with final recommendations, which were presented to the East Lansing City Council in December 2016. One of the new revenue options identified by the team was a City income tax coupled with a millage reduction based on the estimated residential income tax paid.