How would East Lansing’s income tax impact your bottom line?

This November, East Lansing residents will have the chance to vote on whether a city income tax should be implemented for those who live or work in the city.

It was a difficult decision for City Council members, but one that East Lansing Mayor Pro Tem, Ruth Beier says, was needed in order to fix a nearly $200 million problem.

“We haven’t repaired roads in years, we haven’t repaired sewers in 100 years, and we have a large retirement contribution that we we’ve promised that we have to pay by law, by constitution actually, that we don’t have the money to pay,” says Beier.

Beier says, the city of East Lansing has a large amount of built up costs, and it’s gotten worse over the years.

“We’re at the limit in a lot of different measures on property taxes already, so our only option was an income tax,” says Beier.

Even though the council voted to get this proposal on the ballot, voters will have the final say in November.

“There’s going to be one question, will you agree to raise your income tax by 1% for residents and 0.5% by non-residents, yes or no. And that will be tied to, if yes, will you agree to reduce property taxes by 5 mills. So either they both pass, or neither one will pass,” says Beier.

So what does this mean for you?

That all depends on 3-things.

Where you live, work, and how much money you make.

“A professor earning $100-thousand who doesn’t live in the city, would pay 0.5%, so $500 a year in income tax. Somebody making $100-thousand a year who lives in the city, would pay 1%, so it’d be $1-thousand a year, less whatever property tax cut. So if they had a $500 property tax cut, it would be a lower tax increase,” says Beier.

The city of Lansing also has an income tax, so if you live in one city, and work in another, you will not be taxed twice.

Instead you would split the difference between the two cities.

Beier says, this income tax would generate $5-million in net revenue for the city.

$1-million would go toward unfunded liabilities. $1-million toward roads. $1-million toward city parks.

Beier says, the rest would go to local police and fire.

If the vote does not go through in November, Beier says, the council may consider increasing the city’s property taxes.

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