“It’s way too early in the process to really understand what ramifications the city of Detroit will have,” East Lansing Planning Community Development Director Tim Dempsey said.

MSU economics professor Charles Ballard said depending on the next steps of the courts, municipalities across the state and country could experience a harder time borrowing money. In addition, many cities and states across the nation have unfunded pension and health care obligations to their workers and retirees.

“If the bankruptcy results in a very large reduction in those obligations, it could set a precedent that would increase the risks for public employees across the country,” Ballard said.

In contrast, Ballard said a positive impact can come from bankruptcy. Michigan can’t achieve its full potential unless the state’s largest city recaptures some of the dynamism it had in the middle of the 20th century, he said.

“If the bankruptcy can achieve a stabilization of the city’s finances, I believe the prospects for a better future are much brighter,” Ballard said. “And if that comes true, if Detroit reverses its decline, it will be good for the entire state, including East Lansing and MSU.”

Michigan Municipal League Associate Executive Director Anthony Minghine said bankruptcy’s effect on East Lansing is residual, not immediate. He added the fact that credit markets view Michigan municipal debt differently has the potential to increase interest and issuing debt costs.

But Minghine emphasized all effects are tentative based on whatever happens with the courts.

Despite Detroit’s reputation of inefficient public services, interdisciplinary studies in social science junior, and Detroit native, Kayla Godbee said the city does a good job with what it has.

“I actually think the bankruptcy is a good thing,” Godbee said.

“People are freaking out now, but … it gives you a chance to start over.”