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An income tax is a tax levied by a government directly on a percentage of income; it’s typically an annual tax on personal and business income. For a city income tax, the percentage is established at 1% for residents and .5% for non-residents.
The proposal, while similar to the proposal that was placed on last November’s ballot, includes three key differences.
1.) The current proposal is a City Charter Amendment instead of a policy resolution, meaning it cannot be changed by the current or future Councils without another Charter Amendment, which would require another vote of the people. A City Charter is a legal document that defines the powers, functions and essential procedures of city government.
2.) By City Charter, the tax would be time-limited to 12 years, at which time it would automatically expire unless there was another vote by residents to reauthorize the tax.
3.) By City Charter, the tax would also be dedicated for specific purposes, including 20% for police and fire protection, 20% for infrastructure (maintenance and improvement of streets and sidewalks, water and sewer systems, parks, recreation and facilities) and 60% for supplemental payments for unfunded pension liabilities for retired City employees.
The ballot language will read as follows:
Shall Section 11.1 of the East Lansing City Charter be amended to authorize an excise tax on income for 12 years commencing January 1, 2019 implementing reduction of the City property taxes from a maximum of 20 mills to a maximum of 13 mills and requiring the net income tax revenue to be dedicated as follows: 20% to police and fire protection; 20% to the maintenance and improvement of streets and sidewalks, water and sewer systems, parks and recreation and facilities; and, 60% to supplemental payments for unfunded pension liabilities for retired city employees.
Yes. If the new income tax proposal passes in August, the City Charter amendment approved by voters in November 2017 would go into effect, reducing City property taxes from a maximum of 20 mills to a maximum of 13 mills. Similar to the 2017 proposal, Council will reduce property taxes by a flat 5 mills, from the current operating millage of 17.5679 mills down to 12.5679 mills, if the proposal passes. This reduction in property taxes will lessen the impact of the income tax on property owners and, in some cases (i.e. retirees exempt from the income tax), the overall amount of taxes paid will decrease.
The City of East Lansing is facing significant, long-term financial challenges due in large part to flat revenue growth over the past 12 years and rising legacy cost obligations.
When looking back 12 years (FY 2007-FY 2019), the City's general fund totals have only increased 1.9%. This can be attributed to less revenue sharing from the state, tight state restrictions on the ability for local governments to raise new revenue, the ongoing impact of the drop in property values as the result of the recession and Proposal A/Headlee Amendment limits and the fact that the City has a relatively low taxable value per capita (the average amount of taxes that are collected per person residing in a community). Contributing factors of the City’s low taxable value per capita include the fact that the MSU campus is non-taxable and makes up a large portion of the City and a limited number of large commercial businesses in East Lansing.
The City's legacy cost obligations have increased due in large part to the recession and below-average market returns. The City’s pension plan obligations were 80% funded in 2003 (pre-recession) and are only 50% funded today. The City's pension plan liability was $90 million (as of the last valuation on 12/31/16) and the City is required by MERS (the Municipal Employees' Retirement System) to have the pension plan fully funded by the end of Fiscal Year 2041. Additionally, the state is requiring that the City submit a corrective action plan for its pension plan pursuant to the new Protecting Local Government Retirement and Benefits Act.
The City's OPEB (healthcare) liability was $35.8 million (as of the last valuation on 12/31/16).
Community members can learn more about the City’s financial challenges and the steps that have been made to address the challenges over the years at www.cityofeastlansing.com/financialbackground.
Pension benefits are accrued by employees. The Michigan Constitution prohibits the City from diminishing or impairing these previously earned benefits. Beginning in 1999, the City reformed its pension system to reduce future pension costs. Learn more about the City's pension reforms here.
Council’s decision to place the income tax proposal back on the ballot comes after an intensive citizen engagement process, which included providing education on the City’s ongoing financial challenges and gathering community feedback. The engagement process included three community surveys, the results of which can be found here: http://www.cityofeastlansing.com/budgetprioritiesfeedback. As a result of the community engagement process, it was determined that East Lansing citizens were most supportive of a solution that combined both cuts to services and new revenue and that an income tax was preferred over an increase in property taxes by the majority of voters polled as part of the EPIC-MRA survey. There was increased support for an income tax that included a time limit and included dedicating the funding for supported services, such as infrastructure and public safety. The income tax will help the City to maintain its core services, make supplemental pension payments (the City is legally obligated to make these payments for retired City employees) and reinvest in City infrastructure and public safety.
Following the MSU-initiated negotiations in 2017, former MSU President Lou Anna K. Simon and the East Lansing City Council did reach a tentative agreement. The tentative agreement was that MSU would provide $20 million over eight years and, in turn, the 2017 income tax proposal would be taken off of the ballot. Simon took this tentative agreement to the MSU Board of Trustees and it was voted down 4-4. In early 2018, City Manager George Lahanas formally asked MSU Interim President John Engler if MSU would increase its funding support for the fire services that are provided on campus. This request was formally denied.
Residents and non-residents working in the community would pay the income tax. Residents would pay a 1% income tax and non-residents would pay a .5% income tax. There will be $600 deductions for each dependent claimed and some income, such as retirement income, will not be taxed. If a resident lives in East Lansing and works in another community with an income tax or works in East Lansing and lives in another community with an income tax, they would pay .5% to East Lansing and .5% to the community in which they work or live. The impact of the income tax would be lessened for East Lansing property owners by the property tax reduction that voters approved in November 2017, which would go into effect if the income tax proposal were to pass. Property taxes would be reduced from a maximum of 20 mills to a maximum of 13 mills. In some cases (i.e. retirees exempt from the income tax), the overall amount of taxes paid will decrease as a result of the property tax reduction.
No. Per the Michigan City Income Tax Act, the tax can never be more than 1% (residents) and .5% (non-residents). There is no provision that allows the Council to even ask for a higher rate. The rate is locked in and would go into effect January 1, 2019 if the proposal passes.
Income exempt from the income tax would include all retirement income, unemployment income, military pay, tax refunds (city, state and federal) and more. For a more exhaustive list of income exempt from the City income tax, click here.Additionally, individuals who make less than $5,000 annually and do not have a personal exemption because they are claimed on someone else’s taxes would be exempt from the income tax. This would apply to students who are still claimed on their parent or guardian's taxes.
Not without a vote of the people in years in which an income tax is imposed. The City Charter caps property taxes at 13 mills (currently 20 mills) in years in which an income tax is imposed. Any future increase above 13 mills in years in which an income tax is imposed would require another Charter Amendment, which would require another vote of the people.
Property taxes in East Lansing are already high and a large portion of the City consists of MSU, which is not subject to property tax. By combining an income tax with a reduction in property taxes, it will spread the cost of running the City across a larger tax base and offset the income tax paid by residents. Much of the new revenue will come from non-residents who work in East Lansing and utilize City resources. At the same time, seniors who own their homes, will get a tax break because retirement income is not taxed locally.
If you are a resident of East Lansing who owns your own home, it will depend on your household income and the taxable value of your home. Your taxable income will be taxed at 1% and your total property taxes will decrease by about 10%. *Note that retirement income is not taxable locally, so seniors on fixed incomes who own their homes will, in many cases, see a reduction in their total taxes. Residents with specific questions about how the two Charter amendments would impact them, may want to consider consulting with a local tax office/professional. A Taxpayer Impact Calculator For Residents is also available (for estimation purposes only).
Many steps have been taken to cut costs over the years, including budget reductions across all City departments and elimination of 110 full-time positions from 2001 to 2017. Further cuts in staffing will lead to cuts in core services to residents. In addition to placing the income tax proposal back on the ballot, which spreads the cost of running the City across a larger tax base (including non-residents), almost $1.3 million in service cuts have been included in the preliminary Fiscal Year 2019 Budget (including a reduction of four firefighter paramedics and five police officers through attrition, the partial elimination of community agency funding, a reduction in East Lansing Family Aquatic Center hours and more). More significant cuts will need to be made in Fiscal Year 2020 if new revenue is not secured. Learn more: https://www.cityofeastlansing.com/CivicAlerts.aspx?AID=737. Under state law, the only options available for municipalities to raise new revenue are through property taxes and income taxes. Municipalities in Michigan are unable to levy sales tax, for example.
According to Plante Moran’s Income Tax Study, the income tax is expected to produce approximately $10 million, but with an estimated $5 million less in property taxes as a result of the property tax reduction, the total net revenue is estimated to be $5 million annually to be used for the dedicated purposes outlined in the ballot language. The income tax will help the City to maintain its core services, make supplemental pension payments (the City is legally obligated to make these payments for retired City employees) and reinvest in City infrastructure and public safety.
Council has stated an intent to find approximately $3 million in savings annually to cover its ongoing legacy costs (retiree pensions and healthcare) and additional funding for needed infrastructure improvements (streets, sidewalks, aging City facilities, etc.). To achieve these savings, deep cuts would need to be made to areas such as public safety, which makes up the largest part (65%) of the City’s general fund, and Parks & Recreation, which makes up 10.4% of the City’s general fund. Learn more.
The income tax would be implemented on January 1, 2019 and the property tax reduction would be implemented on July 1, 2019. The property tax reduction would be seen on July 2019 tax bills.
You would pay a 0.5% income tax.
Yes. For residents, taxable income would be subject to the 1% tax no matter where it is earned.
Your total local income tax would not exceed 1%. You would file as an East Lansing resident and on your tax form, you would receive a credit for any income tax you paid on that income to Lansing or any other municipality. So, if all of your income was earned in Lansing, that would mean on the 1% total tax, you would get a 0.5% credit on the East Lansing income tax and your income tax would be 0.5% for Lansing and 0.5% to East Lansing.
You would pay a 0.5% income tax to East Lansing and a 0.5% income tax to the jurisdiction in which you live. You would not be double taxed.
Your income tax would be pro-rated by your employer based on the amount of time you worked in the East Lansing community. The tax would only apply to the income earned while working in East Lansing.
Many seniors/retirees would be positively impacted if both proposals pass due to income tax exemptions on retirement income and the reduction in property taxes. In many cases, the total amount of taxes paid by seniors/retirees will decrease.
It would be collected by employers. Residents working in other communities without an income tax would need to file with his or her employer a form on which the employee states the number of exemptions claimed, the city or residence, the predominant place of employment, and the percentage of work done or services performed in the predominant place of employment. The same is true for residents working in other communities with an income tax.
Currently, 23 Michigan communities have an income tax. The communities with a standard 1% income tax for residents include: Albion, Battle Creek, Big Rapids, Flint, Grayling, Hamtramck, Hudson, Ionia, Jackson, Lansing, Lapeer, Muskegon, Muskegon Heights, Pontiac, Port Huron, Portland, Springfield, Walker and Benton Harbor. The communities that tax at a higher rate as permitted by statute include: Detroit, Grand Rapids, Highland Park and Saginaw.
The City currently collects property taxes for the operating budget (17.5679 mills), library (1.9976 mills), solid waste/recycling (1.8250 mills) and debt (.7946) for a total of 22.1851 mills and approximately 36 percent of a property owner’s tax bill. The City is also a collecting agency for Ingham County, East Lansing Schools, Lansing Community College, the State Education Tax, the Ingham Intermediate School District, the Capital Area Transportation Authority and the Capital Regional Airport, which makes up the remainder of the property owner’s tax bill.
Mills, when added together, make up the millage rate for a City. The 2017 millage rate for owner-occupied residential homes in Ingham County and the East Lansing Public School District is 60.0410 mills (approximately 36 percent goes to the City and the remainder is collected for Ingham County, East Lansing Schools, Lansing Community College, the State Education Tax, the Ingham Intermediate School District, the Capital Area Transportation Authority and the Capital Regional Airport). The standard way to find out your actual tax amount based on the millage rate is to take that rate and multiply it by the taxable value of your property, then divide the result by 1,000.
Taxable value of a property is the value against which millage rates are levied to determine property taxes. Residents can find out their taxable value here. Taxable value can also be found on a resident’s property tax bill.
Income tax information is confidential except where a court orders the release of information. Council members will not have access to this information whether we choose to have the state administer the tax or a private contractor administer the tax. It will be no different than their Federal or State tax information. All filings are confidential per MCL 141.674.
425 agreements would not generally be impacted by an income tax. The agreements all contemplate the possibility of an income tax and designate the residents as City residents for such a purpose and designate the tax revenues as belonging to the City. The millage proposed to be assessed along with the income tax would still be above the various millage amounts required to be given back to the Townships under the revenue sharing provisions. The Townships would still get their share pursuant to the agreements regardless of an income tax.
When placing a Simple Recycling bag at the curb, the clearance rule does not apply. The bags can be placed right next to your new recycling cart. Please refrain from placing the bags on top of the recycling cart.
*It should be noted that some condominium and neighborhood associations may have additional regulations.
The City is not able to accommodate the collection of overflow recyclables in the old recycling bins now that the cart system is in place. All recyclable items will need to be placed inside the cart for collection at the curb. In the event of overflow items, the City does offer a year-round drop-off recycling site at 1800 E. State Road.
The carts were initially provided at no cost to residents in fall 2015 and came with a 10-year warranty. After 10 years, if a replacement cart is needed due to wear and tear, it will cost $55 for a 96-gallon cart, $50 for a 64-gallon cart and $45 for a 32-gallon cart. The replacement carts will also come with a 10-year warranty. It's important to note that if a qualifying resident requested a smaller cart in fall 2015 and decide at a later date that the larger cart size is needed, the 96-gallon cart will cost the resident $50.
If you still have questions about the City's curbside recycling program, please contact the East Lansing Department of Public Works at (517) 337-9459 or you can email Cathy DeShambo at firstname.lastname@example.org.
There are a number of bike parking option in the downtown.
Anytime. However, you must be registered at least 30 days before an election in order to vote in that election. To get started, fill out the Voter Registration Application (PDF).
To obtain an absentee voter ballot, residents must complete an Absentee Voter Ballot Application. Absentee voters have until 4 p.m. on the day before the election to obtain and vote an absentee ballot in person at the City Clerk's office. Those planning to vote absentee must return their absentee voter ballot by hand or mail to the East Lansing City Clerk's Office at 410 Abbot Road by 8 p.m. on Election Day. Absentee voters can check the status of their absentee voter ballot online.
Please note that the Lansing Board of Water & Light maintains streets lights throughout the City of East Lansing. To report any outages or problems, please call BWL at (877) 295-5001 or email email@example.com
Federal, State, Local and tribal governmentsChurch and civil organizationsFarmers and custom harvestersApiarian IndustriesFor-hire and private companies
A service brake systemA parking brake systemAn emergency brake system
Interstate transportation: Surge brakes are allowed on any trailer with a gross vehicle weight rating (GVWR) of 12,000 lbs. or less, when its GVWR does not exceed 1.75 times the GVWR of the towing vehicle; or any trailer with a GVWR of more than 12,000 lbs. but less than 20,001 lbs. when its GVWR does not exceed 1.25 times the GVWR of the towing vehicle. See section 393.48 of the FMCSR.Intrastate transportation: Surge brakes are allowed on any trailer when the combination has a GVWR of not more than 26,000 lbs. AND the actual Gross Vehicle Weight (GVW) or GVWR of the trailer is 15,000 lbs. or less. Vehicles of any size that are transporting hazardous materials in an amount that requires placarding or vehicles that are designed to transport more than 8 passengers, including the driver, are prohibited from being equipped with surge brakes in intrastate commerce.
Michigan law adds age, height, weight and marital status protections. Chapter 22 of the City Code further prohibits discrimination based on age, height, weight, sexual orientation, gender identify or expression, student status, legal source of income or the use of adaptive devices or aids.
Discrimination because of sex includes sexual harassment which means unwelcome sexual advances, requests for sexual favors and other verbal of physical conduct or communication of sexual nature.
The term major life activity may include:
The cost for a membership for an East Lansing resident is $20 and the cost for a non-resident is $30.
If you have additional questions, contact the Housing & University Relations Administrator, Annette Irwin, at (517) 319-6801 or by email.
The Department of Planning, Building & Development will send out notifications to rental property owners/managers in the event of a code change.
Salt or sand is applied to ice as needed on major streets and in critical areas, such as stops and hills. Depending on the severity of conditions, crews may also spot treat ice on local residential streets.
If your schedule permits, you may want to wait and clear your sidewalk after City plows have passed through your street. If it is a significant snowfall, the snowplows will probably be back. Streets are typically opened with one pass through, so that streets can be made passable for drivers as soon as possible. Snowplows may return to open the street curb-to-curb. This is done to clear areas for on-street parking, where it is permitted, and to allow melting snow to drain into catch basins. We regret that you may find some of this snow on your recently shoveled sidewalk and you have to shovel it again.