Smart Development, Cool City, No Income Tax // Matt Mitroka

While East Lansing may have limited options to increase property taxes, there is the option to raise more money via property taxes in the form of increased property values and reassessment at the time of sale. While there are the issues of potential bait and switch by developers, etc, there are also the issues that East Lansing seems to be afraid of student developments and increased urban density. Yes, previous eras of MSU students acted in ways that hurt the relationship between the City and the University population. However, at some point, East Lansing must embrace the fact that it is a Big Ten University town and student development downtown should be fostered.

With more people living downtown, comes more development that is not just aimed at students–take the new Target for example. If developers were not forced to build projects that the market cannot support (initially), then they would not need all of these tax breaks. This would then put more tax money back into the city coffers. Additionally, if East Lansing would develop into a more pedestrian friendly city that aims to encourage growth (including in building height) in the downtown core area, more people would want to live in or near the city center. With that “cool city” comes more value and more value leads to more tax revenue. The East Lansing restrictions on development, rentals, etc, has curtailed a lot of potential wealth for home owners.

Recently, I pulled the data from Zillow for each of the cities that are home to a Big Ten University. Notice the median home value and median listing price. They correlate to the popularity of the town, the options people have, and obviously the desire to live in the immediate area, press about great development, etc. East Lansing has ultimately failed to develop more value for homeowners, and more tax revenue for the city.

Perhaps it is time to re-think the way East Lansing does business. Rather than an income tax — be smart about development, encourage students to live downtown, and end tax cuts and brownfield projects.

 

University City Zillow median home value Median list price
University of Michigan Ann Arbor, MI $364,100 $397,150
Northwestern University Evanston, IL $348,900 $385,000
University of Maryland College Park, MD $316,500 $329,900
Penn State State College, PA $310,500
University of Minnesota Minneapolis, MN $259,200 $285,000
University of Wisconsin Madison, WI $249,200 $274,900
Rutgers University New Brunswick, NJ $228,100 $215,000
University of Iowa Iowa City, IA $218,700 $274,900
Purdue University West Lafayette, IN $210,100 $244,500
Michigan State East Lansing, MI $185,200 $209,900
University of Nebraska–Lincoln Lincoln, NE $174,700 $239,000
Indiana University Bloomington, IN $173,500 $259,900
Ohio State University Columbus, OH $145,100 $173,500
Illinois Urbana-Champaign, Il $138,100 $164,900

 

Matt Mitroka
A former resident who would like to move back to East Lansing.

2 thoughts on “Smart Development, Cool City, No Income Tax // Matt Mitroka

  1. Having grown up near Urbana, getting my bachelors degree at UIUC, and living in Madison while my spouse earned a PhD at UW, I have lived the vast majority of my life in Big Ten towns. In my opinion, Mr. Mitroka is spot on in both his analysis of the issues that have led East Lansing officials to throw another “income tax hail mary” AND in his suggestions for sensible ways forward that could address a myriad of problems that many East Lansing residents appear to be afraid of doing the hard work to overcome. Not that I hold out much hope that many residents of East Lansing will heed his advice.

    If not for MSU, East Lansing would be just another small town in mid-Michigan. What other Big Ten town has almost exclusively 2-3 story tall buildings along the main drag across from (or through) campus? Urbana and Champaign have had 10+ story buildings on Green Street for a decade or more. Yet residents supporting the income tax repeat the mantra “MSU needs to pay its fair share” and “students and staff use resources too” ad nauseam. The disdain for students and the university in general is palpable here.

    And that’s the rub. Too many here want to preserve their “small town” way of life over but want “big city” quality of life… and that’s a difficult (if not impossible) task. And when things get difficult… the easy thing to do is to make other people pay an income tax (up to $5 million from NON-RESIDENTS according to mailers from the pro-tax folks). Meanwhile the retired property owners (who will vote to tax others) are more than happy to accept a property tax reduction… all while claiming their love of emergency services and the like. A decidedly uncool thing to do… have workers, tenants, and students all foot the bill to maintain a mythical “East Lansing quality of life” while wealthy retirees pay even less.

    So, Mr. Mitroka, you are undoubtedly correct in your assessment and suggestions, but I wouldn’t recommend holding your breath that the other residents of East Lansing will do the right thing… that inclination seems to be in short supply in this little town.

    Sincerely,
    Dave Finet

  2. As long as we are comparing East Lansing with other Big Ten cities, some research shows that many of them have already thrown their own “tax hail mary” many years ago. A partial list shows residents of these other cities are paying above and beyond what East Lansing residents pay:

    Champaign-Urbana: 2.5% sales tax, plus local motor fuel tax, local hotel/motel tax, local packaged liquor tax, local vehicle tax, local food and beverage tax, local recycling tax and local telecommunications tax

    Columbus: 2.5% income tax

    Minneapolis-St. Paul: .5% sales tax

    Bloomington: 1% county income tax

    Evanston: 2% sales tax

    Lincoln: 1.75% sales tax plus local vehicle tax

    Madison: No other local taxes, but reports from Wisconsin indicate that their local property taxes are among the highest in the nation

    This is probably not a complete list.

    In addition, Minnesota, Iowa, Wisconsin, New Jersey and Nebraska have much higher state income tax rates than Michigan, while Ohio, Illinois and Maryland also exceed Michigan’s rate. I don’t know how the states apportion that money, but there’s a good chance that they share more state revenue with their cities than Michigan does with our low state income tax rate.

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