City officials split over whether East Lansing is in financial trouble

The East Lansing City Council is grappling with budget woes that could spiral into insolvency over the next five years, according to a local publication that closely studied the city's funding issues.

But a debate in the city council over how to address a decrease in revenue reveals that not everyone agrees the crisis needs to be addressed.

East Lansing Info covered the budgeting process earlier this year.

The news site reported on the city’s underfunding of its pension system, which prompted the Michigan Department of the Treasury to put East Lansing on a corrective action plan in 2017.

The city made some adjustments in the 2026 budget to avoid taking too much from its reserves, based on City Manager Robert Belleman’s recommendations.

“Even with the adjustments, the general fund will carry a $2 million structural deficit that city officials will eventually need to address,” East Lansing Info said.

WKAR, Michigan State University’s news site, reported May 28 that the 2026 budget keeps the city at a $2.5 million deficit.

The city has a “maximum two years of burn rate at the level of deficit” it is running, said WKAR quoted council member Erik Altmann as saying.

Altmann said that continued use of city savings could hurt East Lansing’s credit rating and raise borrowing costs.

Mark Meadows, another member of the city council, told Michigan Capitol Confidential in an email that the city is not in a deficit.

“The basis for the (East Lansing Info) comment may have been a budget analysis relating to the use of our $16 million dollar reserve fund,” said Meadows. “The analysis indicated that if we actually had to use that money over the next five years and put no more money in the reserve account during that time, we could be effectively bankrupt if we tried to pay for as many things going forward after that.”

He used an example from the 2025 budget, during which the city budgeted $5 million in reserves but only spent $400,000 from them.

“We are not going bankrupt and we are not in a deficit situation,” Meadows concluded.

The city has set out to collect more revenue in order to use less of its fund balance. It also made cuts, including an EMS position within the fire department that saved $135,810, according to East Lansing Info.

East Lansing did increase its culture and spending, which includes the arts.

Culture is the second-most-funded priority in the budget next to public safety, beating out general government, public works, as well as health, welfare, and community development.

In 2025, the city spent $4.28 million, or 8.3% of its budget, on the Culture and Recreation category, according to the official budget. That spending increased to $4.46 million, taking up 8.6% of the budget in 2026.