A committee appointed by the East Lansing City Council to review local finances is poised to make recommendations about the city’s income tax, facility sales and much more over the next three months.
During the first half of its six-month review period, the committee has spent hours hearing presentations on city department budgets, employee benefits and other components of the city budget. Next, the committee will discuss the information it has gathered and make recommendations for the City Council to consider.
At its meeting on Thursday, the committee created a list of topics it will discuss over the remainder of its review period. Many of the discussions were brief and did not indicate what recommendations the committee may make. Still, the conversations were helpful to understand the types of changes the city may make to address a structural budget deficit.
New recommendations for the income tax could be coming.
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In 2018, East Lansing voters allowed the city to implement an income tax of 1% on residents and .5% on non-residents. The tax allowed the city to tax Michigan State University employees and was paired with a five-mill reduction to the city’s property tax cap.
After the income tax reimburses the general fund for revenue lost by the property tax reduction, 60% of the tax goes to paying down the city’s pension liability, 20% goes to police and fire and 20% goes towards infrastructure.
A graphic included in last year’s budget presentation that shows how income tax revenue is allocated.
Since the tax was put in place, it has been a lifeline for city finances, generating millions of dollars in additional income each year. The tax is set to sunset at the end of 2030, unless it is renewed by voters.
The committee could make recommendations about whether or not to put the income tax on the ballot for renewal and if the revenue should be used in a different way than it is currently. The committee is set to discuss the income tax at its next meeting on April 16.
More regional collaboration on the horizon?
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The committee was initially set to discuss creating authorities by working with other municipalities at Thursday’s meeting. However, East Lansing Chief Financial Officer Audrey Kincade said city attorneys did not respond to a request to come to the committee meeting, delaying the discussion.
Committee Chair Jill Rhode said the review team will later discuss if it would save the city money to work with other jurisdictions to create a parks or fire authority, and if local district courts should be combined.
The committee will look into revenue from MSU.
The impact Michigan State University has on the city’s finances has been widely discussed in city meetings, as the university is East Lansing’s top employer and contributes much of the income tax gains. MSU also relies on city services and land on its campus is not subject to property taxes.
Rhode said she wonders if there’s a way to put a surcharge on MSU event tickets. She clarified she is not sure if this is a possibility, but would like to ask city attorneys about it.
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The committee will also discuss revenue sharing between the state and city. Previously, discussions at committee meetings and City Council have raised questions about if East Lansing receives enough money for the services it provides to MSU’s campus, including fire services.
Recommending changes to employee benefits will be considered.
The cost of benefits for city employees has long been central in discourse about the city’s financial challenges, as unfunded pension liability is one of the main reasons for East Lansing’s budget troubles.
Rhode said the city should also look at how it funds post-employment benefits, saying the city would save money by fully funding its plan. While the city doesn’t currently have money to fully fund the plan, it could look at making adjustments like redirecting funds from the income tax if voters renew it.
Rhode also suggested the committee examine the cost of other employee benefits, like health insurance.
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“I was surprised that employees contribute nothing to health insurance, I think that is extremely rare,” she said. “I think we should address that and look at it and figure out why that is here.”
Committee member Ann Holmes also suggested the committee examine the city’s practices for reviewing new hires and major expenses from year-to-year. This could mean putting a hiring freeze or reassessing expenses at the start of a new fiscal year.
Mayor asks the committee to give recommendation on business fees.
Last budget season, the city installed a new business fee model that aimed to charge bars that saw more public safety issues than others. The Downtown Development Authority contributed $200,000 for police overtime on Thursday through Saturday nights and other busy days downtown. After the $200,000 is expended, businesses are to pay for ELPD overtime costs associated with calls to their business.
The fee applies to businesses with an entertainment license, which includes bars. However, these businesses can choose to pay a fee that is based on occupancy instead.
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The fee structure for businesses with an entertainment license, which includes bars. (From city’s website)
The fee structure was controversial, as some business owners said at city meetings that police calls to incidents near their bars were incorrectly attributed to them and they already pay high taxes. Some also worried the structure would be a disincentive to call the police.
At Thursday’s meeting, Mayor Erik Altmann requested the committee look into a business fee structure that would increase fees for businesses that need police services more often.
“I think there’s a question about whether fees for public safety are allocated appropriately to consumers of public safety services in our downtown,” Altmann said. “There are a couple of bars in particular that consume a lot of public safety services.”
Committee to review DEI department.
Committee member David Lancaster asked that the group discuss the city’s Diversity, Equity and Inclusion Department at a future meeting.
“I wonder why we have a DEI department,” he said. “I would think… since 2020 [when the department was added] that anything should be ingrained into personnel policies, and that would seem to be the responsibility of the personnel department and the city manager.”
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The exchange was brief and it’s unclear what recommendations could be made to the DEI department, but Rhode did add it to the list of topics the committee will discuss.
Recommendations could be issued about taking on debt for facility improvements.
At a discussion-only City Council meeting last month, the body discussed potentially spending upwards of $30 million facility improvements to City Hall, the Hannah Community Center, the fire station, recreational facilities and parking garages.
The cost of a 20 and 25-year bonds with improvements to the third floor of the Hannah Community Center. (From agenda)
The cost of a 20 and 25-year bonds without improvements to the third floor of the Hannah Community Center. (From agenda)
Prior to Thursday’s meeting, Belleman provided the committee with a memo that clarified the costs for the improvements would be absorbed by the city’s budget, not paid for by a property tax increase.
The facility improvements would be paid for using a 20 or 25-year bond. Paying for the improvements through a bond would spread the cost out over decades, but add millions in interest payments.
Should the city sell properties?
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When the city previously discussed using a bond to pay for infrastructure improvements, Altmann floated the idea of selling properties like the Aquatic Center, Soccer Complex and even Hannah Community Center.
At Thursday’s meeting, Altmann said he thinks the sale of city assets must be discussed by the committee. It was explained that in order for the city to sell properties, voters must first approve the sale on a ballot.
Councilmember Mark Meadows said another option to reduce the cost of operating facilities could be contracting with a third-party company to manage them.
Committee to talk about severity of financial challenges, previous review.
Committee Vice Chair Roberta Jameson was not at Thursday’s meeting, but Rhode said Jameson has reviewed recent city budgets and sent questions to try to determine the extent of the city’s financial woes.
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A financial forecast presented to the City Council earlier this year projected East Lansing will be bankrupt within five years if it does not make adjustments. However, in recent years budget projections showing large losses have not come to fruition.
City Manager Robert Belleman previously said the discrepancy between budget projections and year-end results has largely been due to vacant positions and delaying major projects.
Previously, the committee recommended the city start using a “vacancy factor” for budgeting. A vacancy factor would attempt to account for vacant positions during the budget process, and give the city a more accurate look at its finances at the start of the fiscal year.
In addition to Jameson’s coming report, the committee will review recommendations from a Financial Health Review Team that made recommendations about a decade ago. The committee will see what suggestions were made and if the city put these recommendations into place.
Days before the San Diego County Board of Supervisors is scheduled to adopt its multibillion-dollar budget for the year that begins July 1, a government watchdog group is ringing alarm bells over the fiscal health of the nation’s fifth-largest county.
Most concerning, according to an analysis by the San Diego County Taxpayers Association, is a 2026-27 spending plan that is balanced on paper but drifting steadily toward a structural deficit like the one that haunts the city of San Diego.
The driving force behind the worsening budget scenario is a 28% increase in the number of employees over the past decade and a half.
The 23-page analysis also pointed to escalating public health and social services costs, declining investments in capital improvements and an outsized reliance on state and federal tax dollars as drivers of the county’s diminishing financial health.
“The county spends more every year to grow its workforce while the infrastructure that supports operations is allowed to crumble,” said Mark Kersey, president and chief executive officer of the San Diego County Taxpayers Association.
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“More than half of the general fund comes from Sacramento and Washington – dollars the county cannot control – yet it has not prepared for cuts already scheduled,” he said.
A spokesperson for San Diego County said the proposed budget reflects thorough, year-round planning and careful consideration of community priorities and input.
“This ensures long-term fiscal stability while managing a consistently changing environment and meeting the needs of the community,” spokesperson Tammy Glenn said by email. “The analysis of San Diego County’s Taxpayers Association is lacking additional context and details that would provide an accurate representation of the county’s fiscal health and stability.”
Glenn also noted that San Diego County enjoys Triple A credit ratings from all three major rating agencies.
The county Board of Supervisors on Thursday is scheduled to consider adoption of the proposed $9.2 billion budget for the 2026-27 fiscal year that starts July 1. Two Republican supervisors worry that the spending plan relies on reserves; the Democratic majority said the budget is fundamentally sound.
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Now more than 80 years old, the San Diego County Taxpayers Association is a nonprofit, non-partisan government watchdog organization. It regularly produces research and policy analysis in order to promote efficiency and effectiveness among elected officials.
The taxpayers’ review of county financial practices follows a similar – and more scathing – analysis of San Diego city spending the organization released in April.
Like the evaluation of city finances, the latest study noted that the public payroll increased at a rate that was notably higher than the population within its jurisdiction. For San Diego County, the growth in its workforce was nearly four times the rate of residential growth.
San Diego County now employs 6.15 people per 1,000 residents, up from 5.07 full-time workers per 1,000 residents in 2011, the study said. In inflation-adjusted dollars, personnel costs have climbed by 53%, to $3.5 billion, it added.
Labor now accounts for almost 41% of county spending – up from the 32.5% it accounted for in 2011, the report said.
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The growth in payroll was due in part to rising costs for food stamps, health care and other state and federal programs – all efforts that are vulnerable to legislation such as the “One Big Beautiful Bill Act” passed by Republicans in 2025 that slashed Medicaid and Medi-Cal payments, the study said.
“The county is obligated to deliver service levels that follow caseload and eligibility rules set in Sacramento and Washington,” it said. “But the county retains meaningful discretion over how it administers those programs, and also controls fiscal levers that are entirely local.”
The consequences of the county’s fiscal practices are most visible in the region’s declining investments in infrastructure, the taxpayers’ association report said.
“The county’s capital-improvement program has collapsed to $45.8 million in Fiscal Year 2026 – the lowest in the 16-year data set and only 0.5% of the budget,” the report said.
“The county has published no facilities condition assessment for its 7.6 million square feet of buildings, even as the deferred Vista Detention Facility replacement alone nears a projected $1 billion.”
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In 2011, San Diego County dedicated some $289 million to capital projects, the taxpayers’ study noted, 4.1% of overall spending. The sharp decline in spending on long-term projects shows that elected officials are willing to put off difficult spending decisions, the authors said.
“The volatility itself is a finding,” researchers said. “It indicates that the county treats capital investment as discretionary rather than a planned, lifecycle-based obligation.”
While county officials have yet to create a structural budget deficit – where annual obligations regularly exceed revenues and services fluctuate widely from year to year – expected changes in demographics may worsen current conditions, the study said.
The taxpayers’ group said the number of people aged 65 and older is expected to grow by 244,000 over the next two decades-plus, driving up demand for the most expensive services while the working-age tax base shrinks.
“Every one of these pressures – the federal cost-shifts, the aging population, the maintenance backlog – is knowable and already on the calendar,” said Mike McLaughlin, the San Diego County Taxpayers Association chairman.
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“The county’s job is to build a budget that can absorb them,” McLaughlin said. “Instead, the data shows it drawing down reserves and leaning on one-time money in the very year it was warned about the cliff.”
The study also criticized San Diego County for providing limited insight into the specific outcomes of many local programs.
For example, researchers said, a 2024 assessment by the accounting giant Deloitte singled out the county’s escalating spending on efforts to prevent homelessness.
In all, that review found that the county operates 46 homelessness programs funded by 28 different sources. It also identified critical gaps in case-management tools and inconsistencies in its data collection across various programs.
Even though “rent-voucher programs showed better-than-national-average success rates at keeping people housed, the fragmentation of funding and programming makes it difficult for the county – or taxpayers – to evaluate cost-effectiveness or track year over year progress against measurable goals,” the study said.
Founded in 2013, Robinhood(HOOD +2.80%) changed the brokerage industry with its free trading model. Today, the broker’s product lineup has expanded well beyond stocks to include products like cryptocurrencies and prediction markets. With a focus on smaller investors, Robinhood is living up to its goal to “democratize finance for all.” But is becoming a full-service financial platform enough to make the stock a buy?
Robinhood is growing quickly
Although it was founded in 2013, Robinhood didn’t go public until 2021. In its first earnings release in the second quarter of that year, it had $102 billion in custody. In the first quarter of 2026, roughly five years later, that figure had grown to $307 billion, and it is now called total platform assets, given the broadening of the company’s business. The company has rapidly become a major player in the finance industry, building off its early success in attracting younger traders interested in stocks.
Image source: Getty Images.
There’s no question that management deserves a great deal of credit for what Robinhood has achieved. But that alone doesn’t make the stock worth buying. Notably, Robinhood is being afforded a premium valuation, with a price-to-earnings ratio of 45x, compared to P/Es of 39x for Interactive Brokers(IBKR +0.96%) and 18x for Charles Schwab(SCHW 2.97%). A growth investor may be able to justify Robinhood’s valuation, but a value investor likely wouldn’t be interested.
What’s going on with Robinhood’s customer base?
There’s another issue to consider here as well. With a focus on new investors, Robinhood may be taking on more risk than its long-established peers, such as Charles Schwab. This potential risk was highlighted in Robinhood’s solid first quarter 2026 results. Risk-taking is the big issue.
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While Robinhood’s transaction-based revenue jumped 7% year-over-year in the quarter, that growth was largely driven by prediction markets, which boosted “other” revenue by 320%. Cryptocurrency-related revenue, however, fell by 47%. This is notable because it suggests that aggressive investors shifted to what is the current hot trading idea.
Today’s Change
(2.80%) $2.95
Current Price
$108.15
Key Data Points
Market Cap
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$97B
Day’s Range
$103.46 – $109.08
52wk Range
$63.52 – $153.86
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Volume
39.5M
Avg Vol
31.1M
Gross Margin
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94.92%
The problem is that Robinhood has never lived through a deep market downturn, such as the dot-com crash or the bear market associated with the Great Recession. Until it has, it is hard to know what its customers will do when every market seems to be heading lower, and losses are piling up. In other words, what will its customers do when there’s no new hot investment idea to jump on? There is a very real possibility that fear drives less experienced investors to get out of the market and stay out. Risk-averse investors will likely want to wait for Robinhood to be stress-tested before buying it.
Robinhood is not a bad company, but it is still quite young
None of this is meant to suggest that Robinhood is a bad company. It has done incredible things in a very short period of time. But that short period of time is a problem because the vast majority of it has been good for the stock market and investing. Robinhood’s stock is expensive, and the company has yet to face a deep, prolonged market downturn. Only the most aggressive growth investors will likely be interested in it for now.
Charles Schwab is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2027 $43.75 calls on Interactive Brokers Group, short January 2027 $46.25 calls on Interactive Brokers Group, and short June 2026 $97.50 calls on Charles Schwab. The Motley Fool has a disclosure policy.
Elon Musk made history again this month with the largest public offering of a company in the history of the known universe. Space Exploration Technologies, better known as SpaceX, began trading June 12 on the Nasdaq exchange under the ticker symbol SPCX. In the first three days, the stock soared by 50%, blasting the rocketeer past Amazon into fifth place among America’s largest companies.
While the public liftoff was impressive for its size and the hype surrounding it, what truly set this transaction apart was how Musk used his leverage to succeed in changing the rules during the final countdown and advance his own interest at the expense of shareholders.
Space Exploration Technologies is a truly intriguing collection of assets with a history of big accomplishments and even bigger ambitions. At its core is Starlink, a profitable satellite internet and data transmission operation. In the offering document, Musk imagines a network of massive orbiting data centers, which is not entirely crazy and is likely to face less political opposition from nearby residents.
SpaceX also includes the familiar rocket launch enterprise and an artificial intelligence startup called xAI with its Grok AI assistant. While private investors and Starlink have provided operating cash flows to fund the space operations, SpaceX needs substantial additional funding to support its galactic expansion plans. That requires selling shares of this privately held company to the public in an initial public offering.
The process involves a syndicate of investment banks that facilitates the sale of shares held by the company’s founders or private investors at a specific price, the proceeds of which allow early investors to cash out and provide a large injection of capital. Once the shares are sold to public buyers, they change hands on a market exchange at a price determined by supply and demand.
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The prospect of the largest initial offering ever ignited a frenzy of interest. It also allowed Elon Musk to leverage the buzz of a monster IPO to convince Wall Street to bend the rules.
To win the listing, the Nasdaq stock exchange agreed to substantial waivers of its own listing rules. While new companies must typically wait at least three months before they become eligible for inclusion in the popular Nasdaq 100 index, Nasdaq jettisoned this “seasoning” period and allowed SpaceX to enter the index after only 15 days. This tech-heavy index serves as the benchmark for over $1.4 trillion in fund assets that will now be required to sell other holdings to make room for SpaceX in their portfolios. Estimates range from $8 to $15 billion in forced purchases that will create artificial demand for the stock. It also means that many passive investors in retirement funds will end up owning the stock, like it or not.
Nasdaq also waived its own liquidity rules. Ordinarily, at least 10% of the company’s shares must be offered to the public, called the “float,” or percentage, of the total stock value that trades publicly. SpaceX floated only 4.3% of its stock, with private shareholders retaining 95.7%. Using some arithmetic legerdemain, Nasdaq created a “multiplier,” triple-counting the float for companies in the top 40 by total market value. Presumably for firms whose founders’ initials are E.M.
To its credit, S&P Global Inc. considered but ultimately refused to loosen its own standards for joining the S&P 500 index, concerned about the potential reputational damage. The S&P 500 is the benchmark for $20 trillion in assets and opted to retain its 12-month seasoning period as well as a four-quarter profitability hurdle. SpaceX may one day dock with the S&P 500, but the countdown has not started.
Aside from eliciting waivers and exceptions for index inclusion, SpaceX massively advantages its visionary but mercurial founder. In its surprisingly entertaining prospectus, the company boosted Musk’s control far beyond his ownership stake. The shares issued to the public are called Class A shares, and each carries one vote on matters of corporate governance. However, Musk’s stake resides in so-called Class B shares, each with 10 votes, giving Musk 84% voting control.
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There are a few other little gems. The prospectus requires that any disputes between shareholders and the company must be settled privately through arbitration. Lawsuits, including the type of class action suits that tend to hold management’s feet to the fire, are expressly prohibited. And speaking of fire, Musk may only be fired by himself.
Some of these more restrictive provisions have been used before. For instance, in its initial offering, Google essentially pioneered the idea of multiple share classes that vested voting control with the founders. SpaceX propels contempt for shareholder rights into a higher orbit.
Separate from the structural disadvantage to public shareholders is the question of valuation. SpaceX lost nearly $5 billion in 2025 and another $4 billion just last quarter. The initial offering of loss-making companies is hardly new, especially in technologically emerging fields. SpaceX has reached the stratosphere.
With no profits to measure, a useful metric is the ratio of the total value of all the company’s stock divided by last year’s revenues, called the price to sales ratio. When the unprofitable Amazon went public in 1996, its total market value was three times its 1995 sales. Google’s 2004 offering priced at 15 times sales, Facebook at a hefty 28 times, and even Musk’s own Tesla launched at a multiple of 15 times sales. SpaceX cleared the tower at an otherworldly 95 times sales, soaring to 130 by the end of day two as the frenzy intensified. During the first full trading day, it comprised 75% of all stock purchases by individual investors. In the prospectus, Musk expatiates on his plan to colonize Mars. He’s halfway there.
There is no precedent for a public offering of this size, with such a long and speculative arc toward profitability and so few shareholder protections. SpaceX is a pure play wager on a precocious space cadet with interstellar aspirations astride a solid rocket booster. Enjoy the ride.
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Christopher A. Hopkins, CFA, is a co-founder of Apogee Wealth Partners in Chattanooga.
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