City presents FY2026 proposed budget: $307.4 million, big investments planned in roads and public safety

City finance staff presented the Lansing FY2026 proposed budget to the Committee of the Whole, describing a $307.4 million multiyear spending plan, the revenue assumptions behind it, and key capital priorities including roads, public safety and downtown facilities.

Jake Brower, who delivered the budget overview, said the proposed citywide budget totals $307,400,000 and highlighted that the largest single shares of spending are public services and retirement/benefits. Brower described the general fund revenue mix: property taxes (about 33%), income taxes (about 25%), and payments from the Board of Water and Light (about 17%). He said the property tax rate would remain at the current 19.44 mills in the proposal (15.44 mills base + 4 mills for police, fire, roads and parks).

Brower walked council members through key assumptions and risks: FY2026 property and income tax estimates were based on December 2024 valuations and the January state revenue conference; the city is using a conservative approach and has included a $250,000 contingency to absorb possible revenue shortfalls tied to final state estimates in May. He noted long-term pressures including commercial vacancy trends and remote work impacts on income and sales tax receipts.

Significant cost drivers in the proposed budget include retirement contributions (about $36.6 million for pensions and $22.75 million for retiree health care), and an assumption of an actuarially determined employer contribution. Brower said the pension plan uses a smoothing method for investment returns and that market volatility could affect contributions, but the administration is monitoring impacts.

On program and capital investments, Brower outlined these highlights: - Public safety: proposals to reassign five jail sergeants to active patrol, add two funded officer positions, hire a crime analyst and staff an Office of Neighborhood Safety; continuing $300,000 for the Advanced Peace program and adding one firefighter position. - Roads and bridges: over $17.5 million for road, street and bridge improvements including $10 million for local streets, $4.4 million for major streets and $2.9 million for bridge repairs. - Sidewalks and trails: a proposed $1,000,000 package assembled from multiple sources (general fund maintenance $100,000; city millage $300,000; street funds $500,000; gap closures $100,000) for sidewalks, repairs, gap closures and trailways. - Downtown and facilities: $500,000 in revenue-generating investments tied to a new management contract at the Lansing Center (proposed with ASM Global); $1 million for new sidewalks and $4.2 million proposed for the fleet vehicle replacement program.

Brower also provided project-specific funding notes: - Public safety complex: a $175 million program funded via unlimited tax general obligation bonds following voter approval of a 3.9-mill debt millage on Nov. 7, 2022. - New city hall: a $40 million project funded principally with a state grant; final bid packages are still being returned. - Ovation Center (downtown performance center): total project cost $32.9 million with a $20 million city bond, $7 million state grants, $750,000 federal HUD grant, $2.6 million private fundraising and $2.6 million in public education governance fees.

Council members asked questions about the sensitivity of retirement contributions to market swings (Councilmember Spadafore), the source and contingency for state revenue-sharing estimates (Councilmember Spadafore and Cost), sidewalk funding and special-assessment options (Councilmember Hussain and others), and long-term staffing and vacancy challenges in police hiring (Councilmember Jackson).

Brower noted the administration’s approach to manage risks: contingency funds, possible departmental adjustments, and the ability to propose substitute resolutions at budget adoption. He told the committee that the proposed budget was being circulated per the charter schedule and that budget hearings would continue before final adoption in May.