City of Lansing Financial Snapshot FY 2022
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EmailA major concern for the city, yet to perhaps fully be seen, is the potential long term hybrid work of state employees.
The city of Lansing has endured the financial impact of the pandemic like other cities. A major concern for the city, yet to perhaps fully be seen, is the potential long term hybrid work of state employees. This could erode both the income and property tax base for the city. Here we take a quick look at the city’s general governmental finances not including business enterprises like the sewer system.
City general revenues were up almost $20 million in FY 2022 as compared to FY 2021. This was due to a major increase in operating grants. This was tied to pandemic related grant funding for the city so a one-time increase in revenues from those sources. Otherwise, taxes and state shared revenues were essentially flat.
At the same time, city expenses were up almost $70 million. Why the huge increase? Public safety and community economic development were the two areas that saw the largest increases in expenditures. The increase in community economic development was due to increased spending for pandemic related grant programs. The increase in public safety costs was due to increasing costs and charges for pension and retiree health care costs and not to major increase in the number of public safety officers or current salaries. The cost increase in many cases is likely due to one-time expenses and therefore the difference between revenues and expenses is not as great as it initially appears.
The city’s overall savings or what is known as fund balance remains strong. The city had a total of $67 million in governmental fund balance dollars overall. Of these $21 million is available for discretionary purposes. This is close to a 10% savings rate as compared to the typical level of spending across all governmental programs.
The city of Lansing has a reported $50 million in total American Rescue Plan Act funds. Of this amount, the city is reporting about $14 million spent in FY 2022.
Lansing’s overall financial health could be characterized as generally healthy in the short term with some concerns regarding long term financial health due to pension and retiree health care costs. The city has engaged in some new strategies to address those long-term costs and that will be examined in a future blog post.
