Saving Lansing: How the City Got Here

By: Lauren Evans Email
By: Lauren Evans Email

"No one's jumping out the windows, but if they continue to delay and ignore the problem, they're going to be looking at a financial manager or a bankruptcy," said David Hollister, former mayor of Lansing and head of the city's financial health team.

A $9 million deficit is just the tip of the iceberg.

Hollister says the way Lansing operates has got to change.

"Lansing is well-managed," he said. "Lansing has cut 30% percent of its staff. They've required the staff to pay toward their health insurance, to take time off-- furlough days-- 32 hour work weeks. They've closed fire stations, they've sold golf courses, they've made substantial cuts, and yet there's still a $9 million problem."

Despite investments in the capital city, whether it's General Motors, Accident Fund, Blue Cross Blue Shield, there's not enough money coming in to pay the bills.

There are a few reasons for that. Population is down, which means fewer people paying taxes.

Property values are down, so property taxes are down. The state is sharing just over half the revenue it was 10 years ago.

At the same time, costs are going up. Health care costs are rising as people are living longer. The city is also paying for employee pensions. Those costs combined are $53 million this fiscal year, which is nearly $13 million more than four years ago. Plus, the city's aging infrastructure is crumbling.

"The system we've got, it isn't mismanaged," said Hollister. "It's broken."

"It's really just not sustainable anymore," echoed Samantha Harkins of the Michigan Municipal League.

She says it's not just Lansing trying to meet its financial obligations while keeping up services citizens rely on.

"In the last decade or so, state-shared revenue has been cut by $6 billion," Harkins said. "We have seen double-digit, in some communities, double digit decreases in property tax values and our communities are struggling. And it's every community."

For Lansing, Hollister says it's a point where changes must be made. The financial health team is recommending short- and long-term plans, as well as plans for sharing services. Those plans come with some tough cuts.

What happens if they're not instituted?

"The city will be like Flint," said Hollister. "The city will be having an emergency manager sooner rather than later."

"You can put it off," he said. "You can pretend that it's not real if you're a city council member or a mayor, but sooner or later someone's going to be banging on the door saying, the bill is due. Pay up."

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  • by LansingArmyDad Location: Lansing on Mar 17, 2013 at 09:31 AM
    I have a question, In regards to the "lost revenue" from property taxes...... What aren't we seeing or hearing any discussion over the hundreds of thousands of dollars in property and other taxes for the businesses in Lansing, such as the "Troppo" and "Accident Fund" before discussions on raising fees and taxing streetlights to the residents of Lansing? It seems to me that since the predicted benefits of them opening their businesses here in Lansing have not been realized, as evident by the continued loss of city revenue thru taxes, that this topic should be paramount in any discussion dealing with an increase in taxes or fees to the residents of Lansing.
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