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East Lansing outlines FY2027 budget, flags $1.7M shortfall and urges early talks on income-tax renewal
Summary
City officials presented a preliminary FY2027 budget showing a $1.7 million general-fund gap; staff described income-tax allocations (60% pensions, 20% police/fire, 20% infrastructure) and recommended beginning public outreach on renewing the tax ahead of its 2030 expiration.
City staff presented a preliminary FY2027 budget to the East Lansing City Council on April 14 that showed an estimated $1.7 million shortfall in the general fund and a request for council direction on priorities and revenue choices.
CFO Audrey Concincaid said the consolidated city budget totals just over $200 million and that the general fund is largely flat year-over-year after adjusting forecast assumptions and a personnel vacancy factor meant to reflect typical hiring lag. The draft budget incorporates a 3% cost-of-living placeholder and anticipates a modest operating surplus for FY2026, aided by a one-time settlement.
Income tax: Staff emphasized the central role of the local income tax in the city's finances. Under the charter-mandated allocation, net income-tax proceeds are split with 60% directed to pension obligations (supplemental payments), 20% to police and fire operations, and 20% to infrastructure. Staff and treasurer Andrea Smith said a large share of current net receipts comes from nonresident withholding (people who work in East Lansing but live elsewhere). Officials argued the income tax has materially accelerated pension funding and recommended beginning community engagement and education now to consider renewing the tax before it expires in 2030.
Budget trade-offs and staffing requests: The city manager presented a list of departmental supplemental staffing requests totaling roughly $462,000, including several items described as fee-funded (parks programming) and others that would increase general-fund costs (police records assistant; conversion of PACE part-time positions into full-time roles). Council members asked for scenario planning that shows what $500,000 in cuts would look like while protecting core public-safety and infrastructure services.
Court accounting question: Chief Judge Molly Hennessy Greenwalt and Court Administrator Nicole Evans asked council to reconsider a proposed accounting change that would show fines and costs collected by the court as revenues of other divisions (police, parking), citing MCL 600.8379 and potential consequences for state trial-court funding changes. City staff said they would research legal and budgetary implications.
Next steps: Staff will return with follow-up analyses, budget scenarios showing reductions and alternatives to close the gap, and recommended public-engagement plans for any income-tax renewal effort.
