EAST LANSING, MI (WLNS) – MSU President Lou Anna K. Simon does not want East Lansing to implement an income tax and she’s made it clear to the city’s mayor through a series of emails.
Simon is offering to pay East Lansing millions of dollars if it agrees to drop an income tax ballot proposal that she believes would be “harmful to both the city and the university.”
East Lansing Mayor Mark Meadows disagrees, saying he isn’t convinced by the numbers the university has put in front of him.
Here’s why: the city of East Lansing is facing a big financial problem and it’s solution is to implement a city income tax, which will be on the November ballot.
It would levy a one percent income tax on city residents and a half-percent on non-residents.
This will allow the city to collect an additional $5 million in revenue.
Right now, the city is $200 million in debt.
Since the end of July, through a series of email exchanges, President Simon has been trying to convince Mayor Meadows to let go of the proposal, calling it a “highly detrimental taxing scheme” that will impact students and businesses.
Simon has made several different offers to help offset East Lansing’s debt problem by writing the city a check.
You can view those emails at the end of this article.
Mayor Meadows has turned down every one of them, saying it’s just not enough.
He says the money generated by the proposed income tax would go toward “The stabilization of our legacy cost funding and the avoidance of the fiscal cliff that the current payment program will move the city toward.”
“The income tax will be providing critical services to people, police, fire, ambulance services people rely on for safety,” East Lansing City Manager, George Lahanas said.
Here’s an interesting side note. When you compare East Lansing’s general fund to MSU’s, you see a big difference.
Since 2006, the university’s has nearly doubled its general fund, reaching upwards of $1.3 billion during that same time.
East Lansing’s general fund has lost money.
Some of MSU’s growth can be attributed to tuition hikes and other fees.
East Lansing sees value in an income tax
“Over a decade, the city of East Lansing gets by with less money in our general fund we’re about negative one percent over a 10 or 11 year period; that’s astounding,” Lahanas said. “There’s been no growth, there’s been negative growth. How the city can provide services..police fire, all of these costly services, also providing health insurance to employees and all of these other things where costs are always going up but you still have to provide services within that $33 million number. I think it’s a tough situation the city is in and again I think it’s the environment the city has to exist in we have significant challenges raising revenue and this is one of the tools in the toolbox that council considered.”
6 News reached out to MSU for comment on this story, MSU Spokesman Jason Cody says the emails speak for themselves.
He also noted that due to the state campaign finance law, he and the university are limited in what they can say about a ballot proposal.
The university’s president however, can engage in dialogue with the city.
All final decisions are made by the MSU Board of Trustees.
The East Lansing City Council has until Tuesday afternoon at 4 p.m. to drop the income tax ballot proposal if it wishes to.