Lansing: Economy

Major Industries and Commercial Activity

The state government is naturally the most significant employer within the city. Services, wholesale and retail trade, education, and manufacturing (primarily of transportation products) comprise the economic base of the Lansing metropolitan area. Health care accounts for the largest share of the services sector, followed by business services and trade associations. Many insurance companies have corporate or regional offices in Lansing; several are headquartered there. Other important sectors are education—with nearby Michigan State University having annual revenues of about $1.6 billion—along with transportation and public utilities.

The Lansing region is an important notch in the Midwest manufacturing belt. Despite the 2004 departure of the historic Oldsmobile plant, the city received a huge boost by the 2001 opening of the new General Motors (GM) plant. Industrial leaders such as GM adapt progressive manufacturing processes and new technology. Many firms are following GM's lead to institute advanced materials-handling techniques and to encourage participatory management, with the goal of improving product quality and increasing competitiveness. A variety of high-technology firms spawned at Michigan State University has pushed for rapid growth in that industry.

Incentive Programs—New and Existing Companies

Local programs

Promoting the local economy and providing assistance to businesses is the Lansing Economic Development Corporation. The Lansing Brownfield Redevelopment Authority (LBRA) is operated by the city and provides many tax relief benefits to redevelopers. Partnering with the Michigan Economic Development Corporation (MEDC), the LBRA assists in finding sites for businesses to locate and has also received two grants from the U.S. Environmental Protection Agency that it awards. Technology-based business growth in the area is encouraged by the MEDC and the Lansing Regional SmartZone program.

State programs

The creation of new jobs that feed into a prosperous economy is the purpose behind the Michigan Economic Growth Authority. Fiscally-responsible companies in the fields of manufacturing, research and development, wholesale trade, or office operations can make use of Small Business Tax credits. The Lansing area has two designated Renaissance Zones that, if a business locates inside the zone, allows for waiving a variety of taxes such as the single business tax, local real property tax, and utility users tax.

Michigan communities can abate up to 50 percent of local property taxes for up to 12 years. State law also exempts inventory, pollution control equipment, and certain tools, dies, jigs, and fixtures from local property taxes. State law also allows the city of Lansing to abate all new personal property taxes in certain geographic areas to spur economic development. Abatements include all millage, state and local. Eligible projects include manufacturing, mining, research and development, wholesale and trade, and office operations, but not retail businesses.

Michigan has created a system of financial institutions called BIDCOs (Business and Industrial Development Corporations). These semiprivate, independent operations are chartered and partially capitalized by the state and are designed to provide mezzanine-level financing. This is for capital of higher risk than traditional banks will consider and of lower return than venture-capital companies demand.

Job training programs

Michigan offers a coordinated job training system called "Michigan Works!" using federal, state, and local resources to provide a highly productive and trained workforce. The federal Workforce Investment Act and the Michigan Department of Labor and Economic Growth provide funding for the grants that assist in increasing worker productivity. The training itself is done through the institution of the company's choice. Free recruitment and screening services are available for new and expanding employers through the Michigan Employment Security Administration's job service and also through several local school districts.

Development Projects

Lansing's downtown area continues to undergo a facelift that began in the late 1990s. Loft development is bolstered by grant monies if certain criteria are met. One such project that is scheduled for completion in late 2006 is the $7 million conversion of the downtown Plaza One building into offices, retail stores, and about 50 apartments.

In 2001 General Motors (GM) built its first new assembly plant in the United States since 1986, an innovative 1.9 million-square-foot, $585 million Lansing factory whose 11,000 workers produce three different types of Cadillac automobiles. Nearby Delta Township witnessed the opening of a GM stamping plant in 2003 and another new assembly plant is expected to start operations in 2006.

A $67.5 million bond approved in 2003 has allowed for the building of a 175,000-square-foot middle school that represents the first new school in the Lansing School District in 30 years.

Economic Development Information: Lansing Regional Chamber of Commerce, 300 E. Michigan Ave., Ste. 300, PO Box 14030, Lansing, MI 48901; telephone (517)487-6340; fax (517)484-6910

Commercial Shipping

The CN North America, CSX, and Norfolk Southern rail freight lines serve Lansing. More than 30 motor freight carriers transport goods from the city to markets throughout the country. About 24 million pounds of air cargo is handled by several companies at Capital City Airport. Four interstate highways connect the area to all major North American markets, including Canada.

Labor Force and Employment Outlook

Lansing area employers draw from a large, stable pool of highly skilled, educated, professional workers. Michigan State University's thousands of graduates add to the pool; 31 percent of the labor force that is 25 years old and older has at least an undergraduate degree; 39 percent has a graduate or professional degree.

The forecast for occupational categories in the Lansing/East Lansing area by the Michigan Department of Labor & Economic Growth projects a 10 percent increase in all occupations by 2012. Professions such as healthcare, computer and mathematical, and personal care and service lead with gains of at least 20 percent.

The following is a summary of data regarding the Lansing-East Lansing metropolitan area labor force, 2004 annual average:

Size of non-agricultural labor force: 230,500

Number of workers employed in . . .

construction and mining: 9,300

manufacturing: 22,600

trade, transportation, and utilities: 37,000

information: 3,200

financial activities: 15,600

professional and business services: 21,100

educational and health services: 25,800

leisure and hospitality: 19,800

other services: 10,900

government: 65,400

Average hourly earnings of production workers employed in manufacturing: $25.03

Unemployment rate: 6.4% (February 2005)

Lansing: Economy

Largest employers Number of employees
State of Michigan 14,041
General Motors 11,000
Michigan State University 10,000
Sparrow Health System 8,000
Lansing School District 3,500
Ingham Regional Medical Center 2,450
Lansing Community College 2,200
Meijer Inc. 2,175
Jackson National Life 1,385
City of Lansing 1,292

Cost of Living

The following is a summary of data regarding several key cost of living factors in the Lansing area.

2004 ACCRA Average House Price: Not reported

2004 ACCRA Cost of Living Index: Not reported

State income tax rate: 3.9%

State sales tax rate: 6.0%

Local income tax rate: 1.0% resident, 0.5% non-resident

Local sales tax rate: None

Property tax rate: Varies widely from 34.7 to 52.7 mills per $1,000 assessed value

Economic Information: Lansing Regional Chamber of Commerce, 300 E. Michigan Ave., Ste. 300, PO Box 14030, Lansing, MI 48901; telephone (517)487-6340; fax (517)484-6910