(Source: MIRS.news, Published 02/06/2025) More than a year has passed since a Detroit Free Press editorial piece called Lansing a “sad little town,” advocating for the state capital to be moved back to Detroit. Lansing’s insiders were abuzz as a counter-piece in the Lansing State Journal argued against the assessment that the city is unfit to host the capital. 

When the dust settled, Lansing’s advocates and enemies emerged with a common conclusion: the COVID-19 pandemic and its lingering work-from-home culture has caused Lansing’s businesses to lose out on daytime traffic from state employees, not to mention the empty streets on nights and weekends. 

It’s not an impact that’s exclusive to Lansing, but the capital city’s economy gets to benefit from the shopping habits, dining out, living expenses and income tax revenue of state employees. Lansing’s city income tax is 0.5 percent for non-residents, meaning your employer is in Lansing, but the location you actually do your job is not, and 1 percent for residents, meaning the employer and your home address or where you actually do the work are both in the city. 

In-person, hybrid or work-from-home modalities are up to each state department director. Lansing’s income tax isn’t this strict, but technically, an employee should record on their city income tax filing how many days they worked in the city and how many days they worked out of the city, meaning some days state employees are taxed at 1 percent and some days they are taxed at one-half percent. 

When work-from-home was less common, the city would collect 1 percent of your salary every day. But the shift in modality creates missed revenue for the city. 

Detroit Mayor and independent gubernatorial candidate Mike Duggan said on Thursday that city of Detroit employees returned to in-office work as soon as they could in 2021 with no problem. He said he didn’t think it was appropriate to let office workers stay home when police officers, firefighters and EMTs didn’t have that option.  

One solution for the halved income tax revenue from remote workers is to attract them to live in the city, Duggan said. In his presentation to the Lansing Regional Chamber Thursday, Duggan said Michigan’s largest export is young people, and to combat that, Detroit and Lansing have to become “quality of life” destinations so that living in the city is attractive to workers – from whom the city can then collect the second half-percent of income tax, because when they do their work inside the city, it becomes eligible to be taxed. 

And when those recently drawn-in Detroit or Lansing residents (and income taxpayers) finish their work, they might just enjoy dinner, drinks or entertainment near where they live, further stimulating the city’s economy – not just during the day, but on nights and weekends, too. 

Lansing Mayor Andy Schor outlined a similar vision Thursday morning on Michigan’s Big Show. Schor said the biggest impact of state employees not working in Lansing hasn’t been on the city’s budget due to missed income tax revenue, but rather, to downtown businesses that don’t get the weekday lunch sales or happy hour enjoyers they once did. 

Duggan said he’d have to more closely evaluate the decision to bring state employees back to work if he was elected governor in 2026, but he said he believes people work better when they’re on site and they collaborate.  

“I gotta believe . . . I haven’t asked Andy Schor this, but I gotta believe the mayor of Lansing would probably be happy if they got back to the office,” Duggan said. 

Schor said he’s talked with the governor’s team about pushing state government employees to work in person full-time again, but the policy leaves that decision up to department heads. He’s more focused on things like housing development that would have the effect Duggan described not just during the workday, but 24/7. 

“I got this question asked to me in a legislative committee end of last year and my response was, ‘if I had my druthers on behalf of our small businesses, not only would I require all employees to come back, but I’d require all of them to eat out at lunch every day, no bagged lunches.’ But that’s not real,” Schor said.