East Lansing Could Obtain $12.5 Million from Fed Stimulus, But Uncertainty Remains

With the passage and approval of the American Rescue Plan — a $1.9 trillion federal aid package in response to the Covid-19 pandemic — many municipalities across the country are slated to get notable sums of money. The benefit for East Lansing could be big. 

But, according to the City Manager and Finance Director, it’s too early to say how big.

According to data for Ingham County from the U.S. House Committee on Oversight and Reform, the City of East Lansing could receive as much as $12,266,885. But also in the data is an “East Lansing city” listed for Clinton County, set to receive $194,416. That brings the potential total benefit for the whole of East Lansing — which has portions in both Ingham and Clinton Counties — to $12,461,301. 

Analysis by Bridge Michigan shows that this means that East Lansing could obtain about $259 per resident. And along with East Lansing, both Ingham and Clinton County are also poised to receive stimulus money. The same analysis used for East Lansing shows each county getting as much as $194 per resident. 

According to Bridge, “While community leaders cannot use the money to pay pension debts or provide tax cuts, there are few limits on the money. Governments can pay for infrastructure upgrades, hazard pay for workers, parks, downtown improvements and the like.”

ELi asked City Finance Director Jill Feldpausch what this money might be used for, and if the figures were correct. 

“At this point, we have had no direct notification or communication with the federal government on these funds,” Feldpausch wrote in an email reply to ELi on Monday (March 15). “We have heard the same figures as you noted . . . but we are unsure how accurate those are at this time. Similarly, we do not have the specific details on the eligible uses for those funds.”

Feldpausch noted that the current understanding is that the City can use the money to cover Covid-19-related expenditures and, potentially, to recover municipal revenues lost to Covid. Feldpausch also said that the expectation is that half of the funds will be disbursed directly to the City this year, with the other half coming the next. 

“Last, we expect to have reporting requirements on how the funds are expended, and that the funds must be expended by December 31, 2024,” Feldpausch wrote.

City Manager George Lahanas spoke about the stimulus funds during Tuesday evening’s City Council meeting. 

“Now, I’ve had a pretty extensive conversation with our budget director because we’re already in the midst of our budget process, of exactly what that means to us,” he told Council. “And at this point, obviously, it is very good news. But, we also don’t have all the details, and that’s a big caveat. We have to figure out exactly how this revenue can be used, what it can be used for, so in order to do that we have to wait for more of the details to come out. I think at this point it certainly is a positive step.”

Lahanas noted that the infusion of federal dollars likely won’t impact the trajectory of the City’s budgeting process for the next fiscal year (July 1, 2021 – June 30, 2022), which is currently ongoing. If it does, Lahanas says the impact will be positive.

“This is better news. Last time it was bad news. But the process is the same. We’ll keep an eye on it. We’ll follow it. And as we get more information we’ll come back to Council and we will have to make changes to the budget at that point,” Lahanas said, “and hopefully to the good.”