Three Tax Proposals on November 2017 Ballot, Explained
Photo above by Dylan Lees.
Registered East Lansing voters can vote on two East Lansing tax proposals on the November 7 ballot, and those who also live in Ingham County (which is most East Lansing voters) will be asked to weigh in on a third. Here we explain those three proposals in the order in which they will appear on the ballot and point you to ELi’s comprehensive coverage for more information.
Note that registered East Lansing voters can also weigh in on City Council membership on November 7. For information on that, click here.
To find out where you vote, what times the polls will be open, how to get an absentee ballot, and so on, visit the site of the East Lansing City Clerk.
Ingham County Ballot Proposal:
This proposal is called “Establishing Separate Tax Limitations for Ingham County, The Townships, and the Intermediate School District.” It reads:
Shall separate tax limitations be established for an indefinite period, or until altered by the voters of the county for the County of Ingham and the townships and the intermediate school district within the county, the aggregate of which shall not exceed 8.0 mills as follows:
- County of Ingham 6.8 mills
- Townships 1.0 mills
- Intermediate School District 0.2 mills
- Total 8.0 mills
If the proposal passes, County property owners would see an increase of approximately half a mill in total. This would represent a return to 1970 millage rates, which were approved by popular vote at that time.
According to the County’s press release the revenue raised from this increase is estimated at $2.77 million. If this proposal passes, the owner of a property with a market value of about $100,000 would pay about $19 more a year.
Why have millage rates decreased in the County since the 1970s, even though voters did not vote to decrease them? And why do County Commissioners say the County needs more revenue? Read our report.
Proposal to Decrease East Lansing Property Taxes:
This proposal is called simply “Ballot Question.” It reads:
Shall Section 10.5 of the East Lansing City Charter be amended to reduce the current limit on the amount of property tax a City Council may impose from 2% (20 mills) to 1.3% (13 mills) in fiscal years in which the City levies, assesses and collects an income tax pursuant to the City Income Tax Act with the mandatory reduction to begin in the fiscal year following the first year of the tax?
This is the proposal that has been paired with the adoption of the Uniform Income Tax Ordinance (described below) to limit the impact of the income tax on property-owning residents of East Lansing. As the proposal notes, if the property tax reduction passes, it would only go into effect if the income tax proposal also passes.
East Lansing’s Financial Health Team (FHT) estimated that an income tax would generate an estimated $10 million dollars per year, and that about $5 million of that would be collected from East Lansing residents. The FHT recommended lowering the property taxes by about $5 million as a way to limit the impact of the income tax on East Lansing property owners. Read more in ELi’s report examining to what extent tax liability would be offset for homeowners.
The 13 mill rate really represents a reduction of about 4.5 mills over East Lansing’s current millage rate. The City estimates that the average East Lansing property owner would see a property tax reduction of about 10% if this proposal passes and the income tax also passes. If this proposal passes, it will change the City Charter, meaning that it can’t be changed back to a higher millage rate without a majority voter approval.
Want to learn more? Below, we provide a lot of links to our extensive nonpartisan coverage of these paired proposals.
Proposal to Institute a City Income Tax:
This proposal is also called simply “Ballot Question.” It reads:
Shall Ordinance No. 1413, adopting the uniform city income tax ordinance, which imposes an annual rate of an annual rate of tax on corporations and resident individuals of one percent and on non resident individuals of .5 percent effective January 1, 2018, be approved.
The only legal way for a Michigan city to adopt a local income tax is to adopt the uniform city income tax ordinance, which is a state-level ordinance that lays out the specifics of how income tax can be collected, the types of income that can be taxed, and the rate at which residents and non-residents can be taxed. This ballot proposal adopts that ordinance.
Under the uniform city income tax code, each individual is allowed a $600 personal exemption, and all income would be taxed at most one percent (1.0%) for residents and half a percent (0.5%) for non-residents employed in the city, except for income from social security, pensions, or 401K retirement plans.
We have covered the paired East Lansing tax proposals extensively, answering many reader questions, and so we encourage you to take a look at the following:
Why an income tax proposal? This article covers these questions:
- How serious in the financial problem of the City?
- Why does City Council think an income tax is a good way to raise revenues?
- Why didn’t East Lansing take the deal supposedly offered by MSU?
- How else could East Lansing raise money?
Who pays what if tax proposals pass? This article covers these questions:
- Why do residents have to pay twice what non-residents pay?
- Why do residents have to pay on income NOT earned in East Lansing, but non-residents pay only on income earned in East Lansing?
- If I live in Lansing and work in East Lansing, do I have to pay tax and file returns in both?
- What other cities in Michigan have income taxes? What do they collect?
- Do MSU employees working in cities with income taxes (Lansing, Flint, Detroit, Grand Rapids, etc.) have to pay income tax to those cities?
- Will businesses in East Lansing be subject to the income tax?
- If I own East Lansing property, how much will my property tax bill really go down?
- Won’t pairing an income tax with a property tax reduction disproportionately hurt people who are renters?
- What’s to keep my property tax bill from going back up again in a year or two?
- Why have my property taxes gone up even though voters haven’t voted lately to raise City property taxes?
Here's more of ELi's extensive coverage on these ballot proposals:
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