Who Is For and Against the Income Tax Proposal?

Tuesday, October 17, 2017, 7:20 am
Alice Dreger

Above, top row: Habib Jarwan, Mark Meadows, Aaron Stephens; bottom row: Don Power, Susan Woods, Ruth Beier.

East Lansing voters are being asked to decide on two tax proposals on November 7: an income tax proposal and a property tax reduction proposal, with the property tax reduction set to happen only if the income tax passes. (The property tax reduction is meant to sweeten the deal for home-owning East Lansing voters.)

The income tax proposal is turning out to be pretty controversial in East Lansing. So, who is currently for and against the income tax?

The official NO committee:

Two registered Local Ballot Question Committees have formed in response to the proposals, one pushing for the income tax, the other against. The “vote no” committee is called Citizens for East Lansing’s Future. It formed on September 7 and lists as its treasurer East Lansing resident John McNamara and as its designated record keeper Lansing resident Thomas Morgan.

The group’s website names as supporters Donald Power, Habib Jarwan, and Jessie Kinney. Kinney (shown below in a photo from the group's materials) is named as a resident of Avondale Square who describes herself as a homeowner “living paycheck-to-paycheck.” Jarwan is owner of Bell’s Greek Pizza and has said the income tax is bad for small businesses. He was previously named on a press release from Citizens for East Lansing’s Future.

Power served briefly on City Council before resigning, but that record is not mentioned in conjunction with this ballot campaign. The materials from the current campaign describe him as a local advocate of neighborhoods. He previously had a Political Action Committee (PAC) called Neighborhoods 1st.

Citizens for East Lansing’s Future has previously also named as aligned with them Lorenzo Santavicca, President of the Associated Students of MSU, and Ashley Fuente, President of MSU’s Council of Graduate Students (COGS). We will be bringing you a separate report on students’ views of the income tax, but can confirm for now that Fuente indicates she and the COGS Executive Board “are not on board with the income tax.”

Nancy Marr, President of Prime Housing Group, a relatively large local landlord, also came out against the income tax in the press release for the “No” campaign.

Yesterday we asked Morgan of the “vote no” committee about who is funding their campaign. He responded, "Our campaign is being supported by East Lansing citizens and small business owners, all of whom are concerned about the negative impact an income tax would have on local families, workers, small businesses and property values."

He did not provide names or amounts. The first official campaign finance report is not due to the County Clerk’s office until October 27. 

The official YES committee:

The “vote yes” committee is called Committee to Protect East Lansing’s Future. It formed on August 16 and lists as its treasurer Doug Jester and as its designated record keeper Allyse Anderson, both East Lansing residents. Jester is a former mayor of East Lansing and currently serves on the Downtown Development Authority, as well as being East Lansing’s non-voting representative to the BWL Board.

The group’s website does not name supporters, but several members of East Lansing’s current City Council have been distributing their literature, including Mayor Mark Meadows and Councilmembers Erik Altmann (above) and Susan Woods. The view of the group is that the City is facing dire financial circumstances which call for the income tax, as it is expected to net about $5 million per year in new revenue for the City.

Yesterday we asked the “vote yes” committee about who is funding their campaign, but they have not yet responded. As noted above, the first official campaign finance report is not due to the County Clerk’s office until October 27.

Where City Council and Candidates for Council stand:

All of East Lansing’s current City Council, including Meadows, Altmann, Woods, Ruth Beier, and Shanna Draheim have indicated support for the income tax.

Woods and Beier are up for re-election on the same ballot as the tax proposals on November 7. There is one other candidate for election to Council, namely Aaron Stephens. An MSU student, Stephens has said that he supports the current proposal for the income tax, which provides for lower-income-earning individuals, including students, to have a relatively low income tax liability.

Where MSU administrators stand:

The dual tax proposals are designed to target much of the new-tax burden onto nonresident workers in East Lansing, the largest number of whom work at MSU. Various City Councilmembers have said this is a way to get money out of MSU to help pay for the cost of emergency services that East Lansing has been providing to MSU without full reimbursement.

MSU President Lou Anna K. Simon (below) has spoken strongly against the income tax proposal. She has warned that, “in the event an income tax is implemented, MSU will work aggressively to educate its students and employees” about how to “reduce” their tax liability to the City.

We reported that, speaking for themselves, MSU Vice President Bill Beekman and MSU Assistant Vice President for Community Relations Janet Lillie have also been against the income tax. (They work but do not live in East Lansing.)

ELi reporter Jessy Gregg asked all MSU Trustees for their views on a (failed) possible financial arrangement between MSU and East Lansing to avoid an income tax. Only Trustee Dianne Byrum responded, saying, “I oppose an income tax because it will hurt homeowners, students, families and small businesses.” Byrum supported a deal between MSU and East Lansing but not enough of the Trustees agreed to the deal City Council wanted to make it happen.

Byrum, shown above, told ELi, “The State of Michigan has been underfunding both municipalities and higher education for more than a decade. East Lansing has seen cuts in revenue sharing payments and MSU has still not been made whole from a -15% cut in state funding several years ago. This is both of our realities and it draws a sharper point on why we must work together, find ways to leverage our collective assets and redouble our efforts to get along. This is why I strongly oppose the income tax.”

The Lansing Regional Chamber of Commerce’s position:

In August, the Lansing Regional Chamber of Commerce called on East Lansing’s City Council “to withdraw a proposal for a new city income tax from the November ballot. That request came after the Chamber released results of a poll” that the Chamber said showed “a clear lack of support among East Lansing voters for the income tax idea.”

Council rejected the call. This morning, in response to a question from ELi about where the Chamber stands, Eric Dimoff, Director of Marketing and Communications for the Chamber, responded:

"Since our initial request to East Lansing City Council to withdraw the proposal, it has become clear that this is a complex issue that requires more thought and input from residents and the business community. The Chamber and our members believe that the city must adopt significant reforms including a thorough financial analysis of the more than 40 recommendations from East Lansing’s Financial Health Team. Seventy-two percent of members believe the income tax is not necessary while 85 percent oppose the ballot initiative. We have significant concerns with the continuing moving pieces of this problematic proposal."

Dimoff's statement continues, "Residents don’t know what they are voting on. What is the bottom line net gain from the income tax? Where will the money be allocated? Taxpayers deserve answers." (For information on the expected net revenue, read ELi's Jessy Gregg's recent report. City Council recently passed a policy resolution on how the new revenue would be allocated; read more from ELi about that resolution and how such policy resolutions work.)

East Lansing does not have its own Chamber of Commerce, so some East Lansing businesses belong to the Lansing Regional Chamber of Commerce. The City of East Lansing used to belong to the Chamber but the current City Council formally withdrew the City’s membership after the Chamber put out negative campaign mailers in the 2015 East Lansing City Council election.

The position of the City of East Lansing:

By law, the non-elected government of East Lansing has to remain non-partisan in this election.

In the past, City Attorney Tom Yeadon advised City Manager George Lahanas that he can use some City resources, like the City’s Dialog newsletter, to tell voters on whether he thinks they should vote yes or no on various ballot proposals. But, challenged by Don Power about such a move by Lahanas in 2014, in 2016 Michigan’s Department of State determined that Lahanas had violated the Michigan Campaign Finance Act and warned him not to make the same mistake again.

This time around, it appears that Lahanas (above) is being careful not to tell voters to vote “yes” on the income tax proposal. He has instead been giving highly detailed presentations to voters about the City’s financial state and how the tax proposals, if passed, would help with revenues.

That said, the City seems to be specifically responding to arguments raised by the No campaign. Mailers from the No campaign have included the charge that the City has failed to consider all of the recommendations of the Financial Health Team before moving to institute an income tax. Yesterday, the City sent out a special press release announcing, “community members interested in learning more can find a complete list of the team’s recommendations and the City’s follow-up to those recommendations at www.cityofeastlansing.com/incometax.”

Want to learn more?

East Lansing Info provides nonpartisan information to voters. Here is some of what we’ve reported that may be of interest:

Answers to reader questions on the tax proposals

More answers to reader questions on the tax proposals

Will homeowners’ tax liability really be “offset”?

ELi Fact-Checks the Yes and No Mailers on the Income Tax Proposal

Income Tax Could Negatively Impact Development Deals

Voter Guide to 2017 Council Election


Note: This article was corrected after publication to reflect that Thomas Morgan is a Lansing resident. We incorrectly reported his residency as East Lansing, and we are grateful to him for bringing that error to our attention. At 11 a.m. on the date of publication, this article was amended to include the just-received statement from the Lansing Regional Chamber of Commerce and to include links to information about issues raised in that statement.