Council Discusses Major Budget Cuts, Following Income Tax Failure

Above: The Hannah Community Center, shown with the soccer fields in the foreground.

With about 53% of East Lansing voters turning down a proposed City-wide income tax on the November ballot, at its first post-election meeting, held on November 21, East Lansing City Council discussed what to do next about the City’s looming financial crisis. All five Council members indicated interest in potentially cutting various resources and services and in looking at other revenue-raising options.

Before Council got to the meat of the financial discussion, MSU student Devoin Humphreys came to the podium during the public comment period to “caution against the spirit of vindication against voters for failure to approve this income tax measure.” He recommended Council look at property tax increases and cutting such resources as the Family Aquatic Center, which, as ELi has reported, does not pay for itself.

Councilmember Ruth Beier responded by saying that she doesn’t think of cuts as “vindication,” but as following what the voters indicated they wanted—cuts in essential services. She said that 65% of the City’s budget is “essential,” and if the Council is to make a $5 million cut out of its $33 million annual budget, it’s “impossible to avoid” cuts in essential services.

“I don’t want it construed as vindictiveness when it is just math,” Beier said.

Below: Mark Meadows and Ruth Beier at the meeting.

The major problem being faced by the City is a sharp increase in how much the City must pay into the employee retirement system. Mayor Mark Meadows blamed the economy and accounting systems for the problem the City is facing, saying it is hardly alone in the state and nation in facing a budget crisis over legacy costs.

But writing in to Council, Okemos resident Brandel Brogan had a different point of view: “The City needs to face the reality that it has mismanaged its employee benefit programs and created legacy costs that it cannot sustain. I believe the city needs to evaluate their current expenses and live within their means before simply slapping an additional tax on their citizens and others that work in the city.”

At the November 21 meeting, Erik Altmann, who was elected Mayor Pro Tem by the Council earlier in the evening, said that people seem to think, since the Reagan Administration, “roads and police departments are free, government needs to be starved, and taxes are evil.”

Said Altmann, “I think we have a mandate now from the people to starve the beast, and so we’re going to find out what a starved beast looks like. I think that, in the end, we achieved a pretty successful campaign in the sense that voters were fully informed about what choice they were making.”

According to Altmann, cutting $3 million from the City budget would be insufficient because of the need to repair roads. So, he said, a $4 million cut is in order.

“My bike is my car,” Altmann told Council, “and the roads are hazardous for cyclists now.” He said that road conditions “throw you off your bike” and that swerving to avoid road hazards means swerving into traffic.

Altmann also said that City staff needs raises because, with staffing reductions, they are overworked. He said that allowing fourteen public safety positions to disappear through attrition in the next two years will only save $1.5 to $2 million. Much more, he said, must be cut.

Altmann suggests cutting broadly:

In his remarks, Altmann provided a long list of possible cost-cutting options, starting with closing fire station #2, on MSU’s campus and moving the equipment there to the main station on Abbot Road. He said this would “save some operating costs.” He also suggested that 54B District Court be moved out of East Lansing and become more a part of the County court system to save money.

Altmann said that, “come spring,” the City could leave the Aquatic Center, dog park, and soccer complex closed, “as a prelude to potentially selling those off in the future.” He suggested keeping the Hannah Community Center open only on weekends and looking at selling that property, adding, “It would make really nice condominiums.”

In addition, Altmann suggested pulling all financial and staff support for all the festivals, including the art, jazz (shown below), folk, and film festivals, as well as suspending curbside recycling, “unless it saves us money.” He also said that possibly the City’s major June recycling program should be cancelled, along with the farmers’ market, “unless it is a money-maker for the City.”

Altmann also took aim at social services, suggesting that all future support for Helping Hands Respite Center be eliminated along with “all general support for human services” through the community development advisory committee. He suggested cuts for arts and eliminating all support for the Community Relations Coalition, which he said currently gives $15,000 to $20,000 in scholarships to MSU students per year.

Cancelling East Lansing’s membership in LEAP, the Lansing Economic Area Partnership, would save $15,000 per year according to Altmann. Sidewalk plowing along main routes could be eliminated unless the schools insist it is necessary for safety. Bulk leaf pick-up could also be eliminated, he said, letting people pay landscapers or deal with their leaves themselves.

Altmann also suggested no longer filming City Council and Planning Commission, instead providing audio-only recordings, and stopping mailing the City calendar and the Dialog newsletter. He said all boards and commissions not required by law could be eliminated in order to save money on the staff resources dedicated to those governmental units.

In short, he said, “Everybody’s ox gets gored. We are not discriminating.” He said in the end, the cuts would make “everybody really unhappy.”

Other views on Council:

Responding to Altmann, Beier said her goal would not be “to make everybody upset,” but rather “to make as few people upset as possible.” She said she has a “different style” that way. She said she wanted staff to consider all those possible cuts, but also to see “how much revenue we can claw back from the library.”

Beier also suggested selling off the DDA’s Evergreen Avenue properties to see if that would ultimately save money. She also suggested a dedicated roads millage be put to the voters, along with a possible property tax increase.

Below: Erik Altmann and Shanna Draheim speaking at the November 21 City Council meeting.

While she was also interested in a dedicated roads millage, Councilmember Shanna Draheim pushed further on the issue of real property assets, saying all City-owned properties should be appraised and considered for possible sale as a way to increase revenues. Newly-elected Councilmember Aaron Stephens agreed on these points.

Saying she wanted to think about things “from a process standpoint,” Draheim noted that in December, Council will be doing “priority-based budgeting.” She said the City should be asking itself what it should really be doing in terms of services, and whether there might be other governmental bodies, non-profit organizations, or for-profit companies that might provide some of the services on which the City now spends money.

The Mayor responds to the Chamber of Commerce:

In his remarks on the matter, Mayor Mark Meadows noted a letter that had come in earlier that day from the Lansing Regional Chamber of Commerce. In that letter, the Chamber wrote, “Now is the time to reprioritize your needs and wants, which undoubtedly will require difficult decisions. We believe there’s an opportunity for City Council, Financial Health Team, businesses and residents to define East Lansing’s core services.”

Meadows expressed frustration with this letter, saying that the Chamber had spent $30,000 to oppose the income tax that would have helped the City’s bottom line. About the Chamber’s suggestion, in its letter, that the City reconvene the Financial Health Team to look at its 42 findings, Meadow expressed particular ire. It was the Chamber, he said, that claimed in campaign materials that the City hadn’t looked at the team’s recommendations, when, Meadows said, the City had.

“That was just a lie they threw out there,” Meadows said.

Meadows said legacy costs are the City’s “financial and moral” responsibility. He said the Council has a responsibility to the City’s residents to offer revenue-raising options like special millages and increases in property taxes.

Meadows agreed with his colleagues that it was time to ask whether the Hannah Community Center needs to be open during the week, whether the Aquatic Center (below) and soccer fields should be provided, and whether the City should offer pick-up of vegetation during fall leaf season and after storms. Cuts, he said, would have to happen.

“Do we need a solid waste [trash] pick-up system?” he asked. “We have Granger right across the highway.” He went on: “Can the library be handled by the county? Do we need to own our own parking system? That is sold off in a lot of communities.” Do we need a Downtown Development Authority and Downtown Management Board, he asked, or could costs be reduced there?

In the end, Meadows said, he was “not trying to punish people” for voting “what we may feel is the wrong way,” but he said, the community would now have some hard decisions to make.

What kind of City is East Lansing?

Part of the discussion at the meeting with regard to finances involved the question of what kind of city East Lansing is or should be. Altmann began this conversation by saying that the election gave him “a moment of clarity” of how he sees the city. He said it seems to him that East Lansing is not a big city with a big budget “to do interesting things.”

Instead, he said, East Lansing should be seen as a “great bedroom community.” That means, he said, spending money for “good neighborhoods” where people can “be left alone, be safe, and get work done.” He said money should go to infrastructure and public safety in neighborhoods, and the City should move away from trying to provide regional benefits.

On this point, Draheim said she would “respectfully disagree.” She said East Lansing doesn’t need to be a big city, and that it has some small-town charms, but, she said, the City should provide “region-wide” opportunities and benefits to “promote and invest and maintain and attract people here.”

Stephens (above) said he thought “the City offers so much to residents” and said, “this is why I decided to stay here.” He said he thinks East Lansing should see itself as part of the region. He wants to see engagement with community members, through something like an online survey, to find out their priorities. He said he also wanted to see more engagement with MSU on the financial troubles of the City.

The discussion at Council about these issues did not involve any votes on the matter.

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