Interim finance director outlines income-tax revenue, spending priorities and pension progress

Andrea Smith, the city’s interim finance director, briefed the East Lansing City Charter Review Committee on the city income tax during the committee’s Feb. 6 meeting.

Smith said the tax was voter-approved and took effect in February of the year it was passed. East Lansing residents pay 1 percent and nonresidents pay 0.5 percent. The charter directs that income-tax revenue be split 60 percent to unfunded pension liabilities, 20 percent to public safety and 20 percent to infrastructure. Smith said the tax is approved for a limited period and will expire on July 30, 2030, unless reauthorized by voters.

The briefing mattered because the income tax supplies the city’s supplemental revenue for pensions, public-safety training and infrastructure projects — areas highlighted repeatedly in the presentation.

Smith gave a multi-year revenue summary, saying early collection years showed low compliance but that later years grew as the city used state “tape” data to identify taxpayers who filed with Michigan but had not filed the city return. She told the committee that the…