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Posted on: August 9, 2018

City Officials Discuss Next Steps Following Voter Approval of Income Tax Ballot Proposal

EAST LANSING, Mich. — The East Lansing income tax was approved during the August 7, 2018 Primary Election, with 61 percent of East Lansing citizens who visited the polls or submitted an Absentee Voter ballot voting in favor of the ballot proposal.

“We would like to thank community members for coming out to vote at the polls on Tuesday and for supporting the proposal, which will help the City to maintain its core services, make supplemental payments to pension obligations and reinvest in City infrastructure and public safety,” said East Lansing Mayor Mark Meadows. “After the last election, we took a step back and listened to what our residents said they would support during an extensive community engagement process. We used that important community feedback to guide what was ultimately put on the ballot and approved by voters on Tuesday.”

“The approval of the income tax will help us to move the City forward with much-needed reinvestment in public safety and infrastructure, while also helping us to address our long-term challenges for the future financial sustainability of the City. The income tax will also prevent deep cuts to City services, including the closure of facilities and additional cuts to public safety,” said East Lansing City Manager George Lahanas. “We plan to communicate regularly with citizens regarding how the revenue from the income tax is being used and will be looking at contracting with an outside agency to administer the new tax, similar to many of the other 23 communities that have an income tax in Michigan.”

With the approval of the income tax, the City Charter amendment approved by voters last November will also go into effect, reducing City property taxes by 5 mills. The income tax will be implemented on January 1, 2019 and the property tax reduction will be seen on July 2019 tax bills.

According to Plante Moran’s Income Tax Study, the East Lansing income tax is estimated to generate approximately $10 million annually, but with approximately $5 million less in property taxes collected, the net revenue is expected to be approximately $5 million. These funds will be used for the purposes outlined in the ballot proposal: 20% to police and fire protection, 20% to infrastructure (maintenance and improvement of streets and sidewalks; water and sewer systems; and parks, recreation and City-owned facilities) and 60% to supplemental payments for unfunded pension liabilities for retired City employees. The income tax will expire after 12 years, unless reauthorized by voters. Both the time limit and purposes for which the net revenue will be used will be written into the City Charter, which cannot be changed without another vote of the people.

Residents can expect regular communication on the income tax and moving the community forward via the Dialog and e-Dialog newsletters. Community members can sign up for the e-Dialog at www.cityofeastlansing.com/eNews


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