East Lansing:
Getting to Know the City Budget
What is the City Budget?
City government decisions affect daily lives more than most people realize. The city budget in East Lansing shapes the quality of our public services.
East Lansing is a vibrant community that is home to just under 50,000 residents. As a “college town” East Lansing has the task of ensuring that public services are available to both residents and students. Public safety, parks and roads are just a few of the things that the city budget helps to fund. If you're a college student renting an apartment, a family with children, or a recent college graduate working in the city, East Lansing's choices today directly impact your tomorrow in this community.
How does the City Build a Budget?
How does the city build its budget each year? The process takes several months of planning by city staff, meetings to gather public input, and culminating with official adoption by the City Council. The budget cycle usually ends in late May, in time for the new "fiscal year," which is July 1 to June 30 (making the "fiscal year" different from a regular "calendar year").
East Lansing’s Budget Today:
East Lansing is taking proactive steps to ensure financial stability in the face of ongoing fiscal challenges. In the City Manager’s letter to Council, submitted in April 2025, the proposed Fiscal Year 2026 citywide budget totals $139.8 million, a 6.5% decrease from the previous year. The General Fund (which supports services like police, fire, housing, and parks) is set at $52.1 million, down 3.4%.
This budget reflects the loss of revenue from the discontinued LBWL franchise fee, which was ruled an illegal tax in the Heos v. East Lansing case, along with a reduction in state fire protection funding. To bridge this gap, the city is using a portion of its fund balance (savings) and excluding capital projects from the General Fund, which will instead be funded through improvement bonds. Staffing is being strategically adjusted, with new roles added in public safety, courts, and finance, while several underused positions are being phased out. Modest fee increases for programs and business licenses are also planned to help recover service costs.
East Lansing’s budget is primarily funded by property taxes and income taxes.
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Property Taxes: Set by the City Assessor each year, these are paid in two installments (summer and winter). In 2025, they’re expected to generate $16.6 million. They help fund not only city services but also public transit, local schools, and state education programs.
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Income Taxes: Residents pay 1%, and non-residents who work in East Lansing pay 0.5%. In 2025, this brought in about $14 million. Employers in the city are required to withhold this tax, while individuals without withholding must file quarterly payments.
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Other revenue sources include:
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Intergovernmental revenue: $11.8 million
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Service fees: $3.4 million
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Licenses and permits: $2.2 million
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The total General Fund in 2025 was $51.5 million. Income tax returns are due by April 30 and can be filed online, by mail, or in person.
Where does the money come from for the budget?
What is in the 2025 Budget?
Property taxes were the largest source of revenue for the City of East Lansing for 2024, followed by intergovernmental revenue.
The largest areas of expenditures are police and fire services.
What is the income tax and where does the money go?
In 2018, voters in East Lansing passed a local income tax, which became active January 1, 2019. This tax was put in place to help to strengthen the city's economy as well as help the underfunded pension fund. Although not all cities in Michigan have an income tax, East Lansing does have one. The citizens voted for this income tax to help to better fund public services and for the city to have a better flow of income. However, this was approved with a sunset clause which means the income tax has an expiration date in 2032. Voters will have a chance before it expires to reexamine the income tax and possibly vote on keeping it in place.
A portion of the property tax revenue is distributed to other public entities. East Lansing Public Schools, Lansing Community College, the Capital Area Transportation Authority (CATA), and either Ingham or Clinton County, depending on the property's location, receive funding from East Lansing’s property tax. Specific initiatives funded by these taxes recently include upgrades to the Hannah Community Center and Aquatic Center as well as improvements to trails and parks and even new additions to the public softball and soccer complexes.
