Objecting to Possible Income Tax, MSU Says the University Benefits East Lansing Enormously

Above: “Collegeville” historical marker, recounting East Lansing’s and MSU’s intertwined history, and Mayor Pro Tem Ruth Beier.

Even as an MSU spokesperson tells ELi that the benefits MSU already bestows on East Lansing are enormous, MSU and the City are apparently still negotiating over ways MSU might pay East Lansing enough to get City Council to withdraw a proposal for a city income tax.

On Monday, we broke the story that MSU President Lou Anna Simon and Mayor Mark Meadows have been discussing whether MSU might commit enough funds to talk City Council into backing off of a proposed new income tax currently set to go to registered East Lansing voters for a decision on November 7. Mayor Pro Tem Ruth Beier indicated in remarks at City Council last night that East Lansing is still negotiating with MSU’s administration to try to find a way to have MSU contribute more funds to the City’s coffers.

Simon has indicated strong opposition to the scheme, which—because it involves an income tax along with a property tax reduction—would put most of the new tax burden on MSU employees. Last night, Beier said in her Councilmember report, “We are trying to work with MSU to get a compromise.”

But as we reported yesterday, time is running out for Council to pull the income tax proposal off the November ballot.

Earlier yesterday, MSU spokesperson Jason Cody provided ELi a list of what kinds of things Simon was referring to when, in one of her letters to Meadows, she alluded to “the many services that [MSU] currently gives the City on a complimentary basis.” (See Cody’s full response here.)

According to Cody, MSU pays East Lansing about $50,000 per year for overtime pay for ELPD officers dealing with home football weekends. He says MSU also pays overtime and expenses of about $65,000 when MSU is a Final Four basketball participant. Cody additionally cites Sexual Assault and Bias Training provided to ELPD officers, worth, he says, about $15,000, plus equipment and facilities for officer training and support totaling hundreds of thousands of dollars per year.

Cody also named, as examples of complimentary services, access to forensic equipment and support, and the use of MSU PD’s K-9 (dog) units for explosive detection. Says Cody, “Overall, they [ELPD officers] have the benefit of accessing millions of dollars in technology and equipment and the training associated without having to pay for the equipment or the licensing and software or the annual training to stay current.”

I asked Cody to elaborate on some of this—to explain, for example, whether MSU literally writes ELPD a check for overtime for officers on big weekends, whether MSU PD obtains services and technology from ELPD for free as part of their cooperative arrangements, and how many times in the last five years ELPD needed to use MSU Police dogs for explosive detection. I asked about the last because ELPD has its own dogs that are capable of explosive detection, so I was unsure why ELPD would need MSU’s dogs.

Cody responded, “I am not in a position to delve into this right now; I apologize. The email below will have to stand on its own for now.”

In his initial response, Cody also named “many other things MSU does for the community at its cost that benefit the city and its residents.” He gave, as an example, the use of MSU Health Team doctors and nurses by East Lansing residents, and noted that MSU pays for the use of East Lansing’s wastewater treatment plant for its wastewater and makes contributions to the Art, Jazz, Film, and Folk Festivals, and the Community Relations Coalition. He said MSU also provides support for groups like PrimeTime Seniors and financial support to Capital Area Housing Partnership to help City and MSU employees purchase homes in East Lansing.

Cody added that “MSU brings thousands and thousands of people to East Lansing each year via shows, concerts and athletics events, and they spend millions of dollars at East Lansing establishments and shops. According to the Anderson Economic Group, which conducts an annual economic impact of the three University Research Corridor universities, the economic impact of MSU on Ingham County is more than $2.7 billion every year. While that is not all in East Lansing, it is clear the value of MSU to East Lansing far exceeds any associated costs.”

As a follow-up, I noted to Cody that some MSU employees work part- or full-time in Michigan cities that already have income taxes in place. For example, some MSU College of Human Medicine employees work part of their time in Grand Rapids, Lansing, and Flint, three cities with income taxes. (Disclosure: I’m married to a faculty member in that very position.) In such cases, these MSU employees pay income taxes to those cities. (The total Michigan city tax liability for any individual cannot total more than 1% of their salary in Michigan, so City income taxes are paid only on the income earned from working in a given city.)

I asked Cody whether MSU’s position is “that MSU employees working in those cities should not have to pay income tax to those cities? If you believe they should, why is East Lansing different?”

His response, that he was “not in a position to delve into this right now” and that his prior email “will have to stand on its own for now,” also applied to this follow-up question, so I did not obtain an answer.

In her remarks at Council last night, Mayor Pro Tem Beier said that she did not see the amount the average MSU student would have to pay, if the income tax passes, as burdensome, especially “when compared to other costs students have, including tuition.” She denied the claim that prospective MSU faculty and researchers would turn down MSU because of an East Lansing income tax, saying that “hundreds of studies” show that such a tax would not impact decision-making of this sort.

Beier said the income tax, which would be charged to non-residents working in East Lansing (as well as to residents), might technically be “taxation without representation” but said this was true for all income taxes charged to non-residents, including Michigan’s state income tax. Finally, she said she thinks the scheme as presented—paired with a property tax reduction—would benefit the City in the ways intended. Beier is up for re-election on the same ballot as that on which the income tax question is set to appear.

Other members of Council present, including Mayor Mark Meadows and Councilmembers Erik Altmann and Shanna Draheim, had no comment on the matter. Councilmember Susan Woods was absent.

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