Nov. 16 2017 11:26 AM

East Lansing struggles after tax loss


The fight to pass an income tax proposal in East Lansing lost last week at the polls, leaving the city struggling with how to address a growing deficit.

The city’s financial situation must be remedied with solutions outside of an income tax.

What’s left on the table from the Financial Health Team’s recommendations are: millages on public safety and parks and recreation, and a possible vote to override the Headlee amendment, which would allow the city to increase its property taxes.

Mayor Mark Meadows said the city will likely pursue those options in addition to making cuts to employees through attrition. That means when employees leave the municipal government, their positions will not be filled. Official discussions on what path the city will take begin Tuesday.

“The earliest vote could happen in May. I advocate we put the remaining recommendations of the Financial Health Team on the ballot,” said Meadows. Increasing property taxes, he said, “is the wrong way to go, but if people vote for it I will support it.”

But such a move could run afoul of the electorate, which rejected the income tax proposal 53 percent to 47 percent.

New City Councilman Aaron Stephens, who defeated incumbent Susan Woods, ran a campaign of promising to strengthen relations between Michigan State University and the city. Councilwoman Ruth Beier, who was reelected said she has an “optimistic prediction” that his presence could help spark renegotiations with MSU President Lou Anna K. Simon.

Four MSU trustees — Brian Breslin, Joel Ferguson, Melanie Foster and Dianne Byrum — donated money to the campaign effort to reject the income tax proposal, according to campaign finance reports filed with the Ingham County Clerk’s Office.

The financial backing from the trustees is indicative of a gulf between the city and its top employer. Meadows and Simon went back and forth over the summer attempting to negotiate a $20 million payment deal from the university to the city in lieu of an income tax. That proposal died when time ran out because of the deadline for placing the tax plan on the ballot, an MSU spokesman said Tuesday.

As a result, income tax advocates were set up to fight an uphill battle, both from a communications perspective and a financial point. The city found itself without the funds to adequately combat an aggressive opposition campaign, which featured a larger volume of mailers sent to East Lansing residents that Meadows said “proved highly damaging.’’ The support campaign was financed through the Committee to Protect East Lansing’s Future and the opposition through Citizens for East Lansing’s Future.

The Committee to Protect East Lansing’s Future only received a single donation from an outsider. Campaign finance reports filed with the Ingham County clerk show that nearly every penny donated to the ballot question committee came from East Lansing’s own city officials’ pocketbooks. According to their pre-general election statement, they raised $4,595.

Meanwhile, Citizens for East Lansing’s Future easily outmuscled its competition. According to its pre-general election statement and late contribution reports, they raked in $45,420. The Lansing Regional Chamber of Commerce was responsible for a whopping $28,250 of that cash. The four trustees’ donations totaled $1,500. Byrum Fisk Communications donated $1,000.

Supporters of the tax are left feeling like their fellow residents voted against their own interest, while opponents are glad the city will have to find the money elsewhere.

“I voted for the tax and I went door to door to support it,” said Kathy Boyle, a former Councilwoman and Red Cedar neighborhood resident. “When some people get the option to vote for a tax, they’ll always vote against it simply because they don’t like taxes. Then you have people that fell for the propaganda.”

Many bought into the narrative that East Lansing was unfairly shifting its burden onto private citizens who were not to blame for the city’s financial woes.

East Lansing “never addressed their financial problem. The people are not gonna put money down after money down until the city decides what caused it and makes certain it doesn’t happen again,” said Don Power, another former City Council member. “Otherwise we’re putting our money down a rathole.”

Statements by Power as well as his picture were featured on a mailer sent across East Lansing encouraging residents to vote no. Power and other opponents, including Simon, argued the city wanted the tax as a quick fix for its own financial blunders.

Meadows has disputed these claims for months and did so once again during the City Council’s Nov. 8 meeting. Meadows appeared to single out the Power mailer, saying residents had been “lied to by a former Council member.” When Power was reached for comment, he bluntly responded to Meadow’s claim by saying the mayor was “full of shit.”