If the entire township folded into Lansing, that's a big win for the city and the region. I could see this for the NE and western chunks of the township. Who knows what happens with the farm land adjacent to MSU ag areas. It probably makes more sense for that to go to MSU or East Lansing, I guess.
The LSJ has a pretty solid article on the fiasco that is Lansing Township finances. They even discuss a possible merger with Lansing, mentioning how the township residents can still be made to pay the debt even after a merger and the city attorney speaking warmly of the possibility. It got me thinking, would many Lansing residents support a merger if the city were to take on some of the townships debt as part of some sort of merger agreement? I know I'd be willing to cough up a little extra for a special assessment to dissolve the township entirely into the city, I think that would have a significant positive long-term impact on the area.
Regardless, it seems this saga will continue for awhile. The township supervisor was noted as saying that default or an emergency manager are not an option and they intend to grow their tax base to get out of this situation. I just hope their ineptitude doesn't harm their neighboring communities, the township has jurisdiction over some important and highly visible areas.
The ONLY reason for township residents to vote for annexation would be for the debt to be spread out. And when a municipality annexes another, the state law says that the default position is that the annexing municipality incurs all debts, liabilities, etc. of the annexed municipality:
"Whenever a city, village or township is annexed to a city, the city to which it is annexed shall succeed to the ownership of all the property of the city, village or township annexed, and shall assume all of its debts and liabilities."
I guess the city then could create a special assessment for the annexed area to make the residents pay off that bond debt, but why would they do that? You can't sell annexation with the fact that they'd have to pay off their former debt plus now be subjected to city taxes, too. That doesn't make sense. I guess this is all to say that there wouldn't be any question about the debt. It'd be spread out over a much larger city, which is the ethical thing to do, since you're taking in these new taxpayers as equal residents.
@MichMatters The article states that the township residents debt does not just automatically spread out to the wider city upon annexation:
While there is a process for Lansing Township to be absorbed into another contiguous municipality, it would not fix their debt problem, Tatum said.
If Lansing were to absorb Lansing Township, it's likely the state would set up a special tax district in the former boundaries of the township and the city could use money from it to pay the debt, Tatum said.
“Essentially, the citizens who incurred the debt remain responsible for it,” he said.
Lansing City Attorney Jim Smiertka said the city would probably entertain a proposal if citizens initiated one. However, there is uncertainty about how the debt would be handled, he said.
@MichMatters I don't attempt to be my own lawyer because I'm not a legal expert and any particular bit of code doesn't exist in vacuum, there's other related laws and case law on top of all that. The people quoted in the article are a relevant financial expert who works as a government advisor and the city attorney, I trust they are more familiar with the law books than you or I.
Maybe in practice, you guys are saying the same thing. As township residents, they would lose services due to debt repayment. But as part of the city, Lansing could create a special district by which taxes collected within the district are funneled towards that existing debt, but residents don't lose out on the services provided by the city. It would be a bit of a shell game, technically former Lansing Township residents are still paying their debt, but because they continue to get city services, it's as if the debt were spread across the city tax rolls.
I wouldn't see a scenario where former township resident's tax structure would be such that they would pay city taxes plus an additional debt assessment. No one would vote for that.
@sabatoa Yeah, I was just reposting what the two experts consulted with in the article said, I have no personal opinion on the legalese. My only argument is that given the statements of the experts, the distribution of an annexed communities debts is more complex than a single sentence in state law.
I agree that the Township residents wouldn't go for that "likely" scenario of a special assessment district proposed by the guy consulted with in the article. I personally would be willing to waive that special assessment district or create a different one to spread the debt out among the newly consolidated city, whatever is legally necessary.
The indebtedness and liabilities of every city, village and township, a part of which shall be annexed to a city shall be assumed by the city to which the same is annexed in the same proportion which the assessed valuation of the taxable property in the territory annexed bears to the assessed valuation of the taxable property in the entire city, village or township from which such territory is taken.
Some of this is paid back through the sell of real property in the annexed area. But, yeah, the default is not a special assessment district; that would be a city's option - a dumb one - but it's not the default of annexation.
As township residents, they would lose services due to debt repayment.
There's obviously a long road ahead and a lot of questions to be answered but even if this first effort falls short it seems like the beginning of the inevitable dissolution of the township.
Comments
Regardless, it seems this saga will continue for awhile. The township supervisor was noted as saying that default or an emergency manager are not an option and they intend to grow their tax base to get out of this situation. I just hope their ineptitude doesn't harm their neighboring communities, the township has jurisdiction over some important and highly visible areas.
https://www.lansingstatejournal.com/story/news/2022/06/23/lansing-township-debt-experts-whats-next/7580076001/?fbclid=IwAR1Mdda5oFdBbu1dA8U5k0pruzhd-Kc5XVpR5eDag5CZgmyz86dr3gGxL-w
I guess the city then could create a special assessment for the annexed area to make the residents pay off that bond debt, but why would they do that? You can't sell annexation with the fact that they'd have to pay off their former debt plus now be subjected to city taxes, too. That doesn't make sense. I guess this is all to say that there wouldn't be any question about the debt. It'd be spread out over a much larger city, which is the ethical thing to do, since you're taking in these new taxpayers as equal residents.
I wouldn't see a scenario where former township resident's tax structure would be such that they would pay city taxes plus an additional debt assessment. No one would vote for that.
I agree that the Township residents wouldn't go for that "likely" scenario of a special assessment district proposed by the guy consulted with in the article. I personally would be willing to waive that special assessment district or create a different one to spread the debt out among the newly consolidated city, whatever is legally necessary.
Some of this is paid back through the sell of real property in the annexed area. But, yeah, the default is not a special assessment district; that would be a city's option - a dumb one - but it's not the default of annexation.
I have absolutely no idea what you meant by this.
https://www.lansingcitypulse.com/stories/city-of-lansing-asked-to-annex-eastside-portion-of-lansing-township,21862
There's obviously a long road ahead and a lot of questions to be answered but even if this first effort falls short it seems like the beginning of the inevitable dissolution of the township.