Mayors from Michigan cities that collect income taxes, including Lansing and East Lansing, are backing a plan that would protect expected income tax revenues during the pandemic.
Some cities collect income taxes from people who work in those cities but don’t live in them. Because COVID-19 has forced people in many industries to work from home, some may seek refunds. If that happens, the Michigan Municipal League warns that two dozen cities in the state could miss out on $160-million dollars this year. They hope lawmakers will block refunds during the lame duck session.
Lansing mayor Andy Schor says income tax money pays for important services, saying “it’s a concern. We’re waiting on the federal government for a stimulus, which I don’t know if that’s going to happen or not. The state’s done their best to help us, but these are revenues that we had planned to collect.”
In East Lansing, this is the first year of a new income tax, and Mayor Aaron Stephens says the city’s estimates were conservative. He explains that "we weren’t relying on that money, let’s say for the first year, because we didn’t know how much truly it was going to be.”
Stephens says the income tax is largely dedicated to paying down pension costs, and some money might have to be diverted from infrastructure and public safety.