106 YEARS OF UNCOMPROMISING POLICY RESEARCH
May 2022 | Report 413
38777 Six Mile Road Suite 208| Livonia, MI 48152 | 734.542.8001
115 West Allegan Suite 480 | Lansing, MI 48933 | 517.485.9444
P.O. Box 1612 | Holland, MI 49422 | 616.294.8359| crcmich.org



BOARD OF DIRECTORS
Citizens Research Council of Michigan is a tax deductible 501(c)(3) organization
Chair
Michael P. McGee
Vice Chair
Chase Cantrell

Bridge Detroit

Dickinson Wright PLLC

Plante Moran, PLLC

Penske Corporation

Comerica Inc.
Chase L. Cantrell
Building Community Value
Stephan Currie
Michigan Association of Counties

Ernst & Young LLP

Deloitte Tax LLP

Dykema

American Red Cross

Wells Fargo
Ron Hall
Bridgewater Interiors

CHN Housing Partners

Detroit Regional LGBT Chamber of Commerce

DTE Energy

W.E. Upjohn Institute
Earle “Win” Irwin
Irwin Seating Company

ITC Holdings Corporation
Nick Khouri
City of Detroit, Ret.

CMS Energy Corporation

Varnum LLP
Michael P. McGee
Miller, Caneld, Paddock and Stone PLC

Mervenne & Company
Aleksandra A. Miziolek
Cooper-Standard Automotive Inc., Ret.

Kelly Services

Governmental Consultant Services, Inc.
Maureen McNulty Saxton
Van Dyke Horn Public Relations
Neil Sheridan
Michigan Townships Association

Midland Business Alliance
Kathleen M. Wilbur
Michigan State University

The Athena Financial Group
Co-Chairs



Saginaw Valley State University

Detroit Regional Chamber

Washtenaw Community College

University of Michigan-Flint

Brooks Capital Management

NAIAS
Matthew P. Cullen
Trustee

Trustee

Central Michigan University

Metro Detroit Black Business
Alliance

Dickinson Wright PLLC

University of Michigan-Flint
Randall W. Eberts
W.E. Upjohn Institute

Ralph C. Wilson Foundation

Ferris State University
Scott Ellis
Michigan Licensed Beverage
Association

Northern Michigan University

InvestUP

Manoogian Foundation

Michigan Municipal League

University of Michigan Dearborn

Trustee

Michigan Health Endowment Fund
Marybeth S. Howe
Wells Fargo

The Kresge Foundation

Frey Foundation

Deloitte. Retired

Michigan Technological University

Crain Communications, Inc.

42 North Partners LLC

Michigan Independent Colleges and
Universities

Edw. C. Levy Co.

James and Lynelle Holden Fund
Alphonse S. Lucarelli
Ernst & Young LLP. Retired

Grand Valley State University

McGregor Fund
Michael P. McGee
Miller, Caneld, Paddock and
Stone PLC
Larry Merrill
Public Policy Associates

Mervenne & Co.
Aleksandra A. Miziolek
Cooper-Standard Automotive Inc.
Mark Moreno
Michigan Hispanic Chamber of
Commerce

PVS Chemicals

Oakland University
Philip H. Power
The Center for Michigan

Plante Moran

University of Michigan

Clark Hill PLC

Miller, Caneld, Paddock
and Stone PLC

CMS Energy Corporation
Arnold Weinfeld
Michigan State University

Wayne State University
Monica Woodson
Girl Scouts of Southeastern
Michigan
COUNCIL OF TRUSTEES
Contents
Summary .................................................................................................................................................... iii
Introduction .....................................................................................................................................................1
Detroit’s General Fund .......................................................................................................................................2
Revenues ...........................................................................................................................................2
Property Tax ...............................................................................................................................3
Municipal Income Tax .................................................................................................................3
Utility Users’ Tax ..........................................................................................................................4
Casino Wagering Tax ..................................................................................................................4
State Revenue Sharing ...............................................................................................................5
Potential Risks and Revenue Forecasts ............................................................................................5
The FY 2023 Budget ..........................................................................................................................................7
Approved Budget ...............................................................................................................................7
Budget Highlights ..............................................................................................................................7
Retiree Protection Fund .....................................................................................................................8
One-Time Spending ...........................................................................................................................8
Rainy Day Fund ..................................................................................................................................9
Department and Agency Spending ...................................................................................................10
General Services ......................................................................................................................10
Fire and Police ..........................................................................................................................11
Public Works .............................................................................................................................11
Innovation and Technology ......................................................................................................12
Demolition .................................................................................................................................12
Transportation ........................................................................................................................... 12
Elections ..................................................................................................................................13
Housing and Revitalization .......................................................................................................13
Debt Service .............................................................................................................................13
Evaluating the Budget ......................................................................................................................................14
Annual Pension Contributions ..........................................................................................................15
Pension Amortization Period ............................................................................................................15
InationaryImpactsontheEconomyandtheUkrainianWar ...........................................................16
Conclusion ...................................................................................................................................................17
Tables
Table 1 City of Detroit Budget FY2022 and FY2023 ..........................................................................................7
Table 2 Major Funding Changes in FY2023 Budget ...........................................................................................8
Table 3 Supplemental One-Time Funding in FY2023 Budget (FY2023) ............................................................9
Table 4 Department and Agency Spending (FY2023) ......................................................................................11
Charts
Chart 1 General Fund: Revenue Sources, FY2002 to FY2023 .......................................................................... 2
Chart 2 Property Tax Revenue, FY2002 to FY2023 ...........................................................................................3
Chart 3 Income Tax Revenue, FY2002 to FY2023 ............................................................................................3
Chart 4 Utility Users’ Tax Revenue, FY2002 to FY2023 .....................................................................................4
Chart 5 Casino Wagering Tax Revenue, FY2002 to FY2023 .............................................................................5
Chart 6 State Revenue Sharing, FY2002 to FY2023 .........................................................................................5
Chart 7 Total City of Detroit Budget, FY2019 to FY2023 ....................................................................................7
Chart 8 Retiree Protection Fund, FY2018 to FY2023 .........................................................................................8
Chart 9 Rainy Day Fund, FY2018 to FY2026 ...................................................................................................10
Chart 10 Fire and Police Department Appropriations, FY2019 to FY2023 .......................................................12
Chart 11 Debt Service Payments, FY2022 to FY2023 .....................................................................................13
Chart 12 Baseline Budget Forecast, FY2022 to FY2031 .................................................................................14
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
iii
Analysis of FY2023 City of Detroit Budget
Execuve Summary
The FY2023 City of Detroit Budget has been
lauded as a “return to normal” budget restoring the
pre-pandemic status quo and managing risks with
contributions to reserves and spending restraint.
When the pandemic struck, the mayor outlined
nearly $350 million in pandemic-related spending
cuts to maintain a balanced budget without laying
oanyfull-timecityemployees.Sincethen,thecity
has seen revenue growth beyond initial projections
and appropriated funds in the new FY2023 budget
are set to restore all pandemic-related budget cuts.
The FY2023 overall budget of $2.5 billion is balanced.
It marks a 4.9 percent increase from the $2.3 billion
budget in FY2022. Operating budget balance is
achieved without use of rainy day fund reserves or
one-time federal COVID-19 relief dollars.
The FY2023 budget is a reflection of the city’s
revenue outlook which continues to improve following
twochallengingscalyearsofrevenuelossesdriven
by the pandemic. Recurring city revenues that make
up the city’s general fund are forecasted to exceed
pre-pandemic levels.
Budget stabilization was aided largely by strong
recovery in onsite wagering taxes and collection of
new internet gaming and sports betting tax revenues.
More favorable projections of remote work also
bolstered city revenues as municipal income tax
collection estimates were higher than had previously
been expected.
The city’s $826 million in federal American Rescue
Plan Act (ARPA) funds add stability to the city’s
budgetandnancialstandingbyacceleratingprojects
to improve the tax base and community well-being
while preserving reserves and resources that would
have otherwise been used to fund improvements and
shortfalls. None of the city’s funds are being used
as revenue replacement or for recurring expenses
which place the city in a good position to increase
its annual budget.
Key Takeaways
• The City of Detroit’s FY2023 $1.2 billion General Fund budget has been lauded as a “return
tonormal”spendingplantorestorethepre-pandemicstatusquoandmanagescalriskswith
contributions to reserves and spending restraint.
• City revenues have recovered from their pandemic hit with income tax revenue gains from non-
resident workers returning to their Detroit workplaces and the addition of blue collar and service
industry jobs aided. Appropriation highlights focus on returning operating department funding to
pre-pandemiclevels,payingodebtandputtingtaxdollarsintovarioussavingsaccounts.
• While the approved FY2023 budget is balanced, the long-term budget forecast projects that on-
goingrevenuegrowthwillnotbesucienttomeetestimatedspendingpressuresinthenearfuture.
This forecast, based on a number of assumptions, presents a small, but growing, operating budget
shortfall beginning in FY2027.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1

Analysis of FY2023 City of Detroit Budget
The FY2023 General Fund budget includes
increases in recurring expenses as well as one-
time spending items. The FY2023 budget makes
targeted investments in key areas of the city such
asbeautication,transit,cityreserves,andpension
funds. It also aims to restore the pre-pandemic status
quo budget as the economy and revenues of the city
continue to recover post pandemic.
However, the budget does face some signicant
revenue risks that must be monitored to avoid
disrupting the current balance between ongoing
revenues and expenses. These risks include slower
than projected growth in General Fund revenues,
slower than anticipated employment and wage
growth, the persistence of remote work models,
economic impacts from changing workplace and
consumer behavior, reductions in local funding
from the state and federal government, additional
COVID-19 variant-related economic disruptions,
ination,thewarinUkraine,andcontinuedsupply
chain issues.
In addition to these potential revenue risks, the city
will have to resume annual contributions to its two
pension funds from the General Fund in FY2024. Part
of Detroit’s historic bankruptcy agreement included a
debt-cutting plan and a nine-year break from dealing
with most of the pension related debt; instead, those
pension costs were met through contributions from
private parties and the State of Michigan, part of the
Grand Bargain agreement that followed the city’s
bankruptcy. That reprieve is almost up.
The city will have to fund a substantial portion of the
obligations for the General Retirement System and
the Police and Fire Retirement System beginning
2024. This will impact the city’s bottom line in a way
that it has not since the 2014 bankruptcy agreement.
The FY2023 budget manages risks by making
concerted contributions to reserves and employing
spending restraints. As it stands, the budget is
balancedbecauseofthecity’sconservativenancial
and economic forecasts that are a result of strong
institutionalframeworksandstrongscaldiscipline
supported by policies, transparency, and action.
While the approved FY2023 budget is balanced,
the city’s long-term budget forecast shows that
projectionsofon-goingrevenueswillnotbesucient
to meet spending pressures in the near future.
This forecast, based on a number of assumptions,
presents a small, but growing, operating budget
shortfall beginningin FY2027. City ocials must
monitor the long-term health of the budget and take
all necessary steps to maintain operating balance
or risk heighted oversight from the Financial Review
Commission.
Since the Plan of Adjustment, the city has implemented
many programs and departments that have been
funded by one-time contributions. Much of the
spending related to improvements in infrastructure,
neighborhoodbeautication,andaddressingequity
issues is coming from one-time contributions. While
this spending has been important and necessary for
the city’s growth it may prove to be unsustainable in
the long run because the city will not have the revenue
baseline to support the additional infrastructure,
services, and personnel.
Structurally, this creates a potential problem for the
city’s future because one-time contributions do not
account for service needs that will need to continue
to be funded once those one-time expenditures are
exhausted. The city’s revenue baseline will have a
hard time sustaining expenditures in the future that
will require more government spending to maintain
new infrastructure, personnel and services.
In addition to the pension contribution payments
that will resume in FY2024, the city has to continue
growing its tax base to increase city revenues in a
manner that will sustain new, acquired expenditures
or use more restraint when considering new
expenditures to live within realistically expected
revenues.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
1
Analysis of FY2023 City of Detroit Budget
Introducon
The adoption of the City of Detroit’s Fiscal
Year (FY)2023 budget continues a trend that
began following the adoption of the 2014 Plan of
Adjustment of crafting sensible balanced budgets
that are conservative, practical, and responsible. The
pandemic could have easily derailed the city from this
path, but Detroit’s revenues continue to grow which
have improved its budget position. It has been able
to build up its reserves in both the rainy day fund and
the Retiree Protection Fund.
The city’s revenue outlook continues to improve
followingtwoscalyearsofrevenuelossesdriven
by the pandemic. The FY2023 budget is supported
by this strong nancial standing as the city has
initiated its long-term recovery from the pandemic.
Thecitywasabletosustainitsreservesandoset
severe revenue losses through quick cost reductions
and use of one-time federal COVID relief funding.
The budget is also based upon estimates that show
recurring city revenues exceeding pre-pandemic
levels due to stronger income tax collections and
increased casino wagering tax revenues due to the
enactment of internet gaming and sports betting in
2021.
At the onset of the pandemic, economic forecasters
were grim about the impact that job losses and
remote work would have on the city’s income tax
revenue. Two years later, the city’s income tax
collections have proven to be resilient as projections
for the amount of remote work and employment rates
have been adjusted more favorably.
Long term, the city does face some risks. Annual
pension contributions to two dierent retirement
funds were put on hold for a time following
bankruptcy and are scheduled to resume in 2024.
This presents risks to the budget because the annual
required contributions for these payments can vary
substantially if investment and acturarial assumptions
are not realized. The city has been making voluntary
contributions to a Retiree Protection Fund that will
provide some cushion against the uncertainty of
future pension costs. However, recent actions to
shorten the amortization period for the city will require
larger annual contributions upfront, thus impacting
the city’s bottom line.
The city’s revenue recovery post-pandemic and
the pace of economic recovery on the city, state,
and federal levels all present potential risks to the
city’s budget. The city has limited revenue-raising
ability and existing revenue is sensitive to economic
uctuation.Risksremainfromthefutureofremote
work,changesineconomicbehaviorduetoination
and the war in Ukraine, and changes in legalized
gambling behavior.
The increasing and changing composition in the
city’s workforce are positives for the city’s income
tax collections but could present risks in the future
as a post-pandemic “new normal” for work takes
shape. In addition, the pandemic is not over yet and
there are still risks from future COVID variant-related
economic disruptions.
Overall, the city presents a balanced budget for
FY2023, but the city will have to remain proactive to
maintain balanced budgets in coming years. Since
the Plan of Adjustment, the city has implemented
new programs and departments. Much of the
spending related to improvements in infrastructure,
neighborhoodbeautication,andaddressingequity
issues is coming from one-time contributions. While
this spending has been important and necessary for
the city’s growth it may prove to be unsustainable
in the long run because the city will not have
the revenue baseline to support the additional
infrastructure, services, and personnel.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
2
Analysis of FY2023 City of Detroit Budget
The city’s budget is composed of various funds: the
General Fund is the primary discretionary operating
fund and supports much of the city’s core services
including several of the city’s primary services such
aspolice,re,parking,publicworks,andcommunity
and youth services.
Other major funds include enterprise funds, grant
funds, and various other restricted funds. Revenue
from these funds are generally earmarked for
specic purposes. Grant funds are made up of a
mix of funding sources from the federal and state
government, as well as from other sources.
Enterprise funds account for business-type activities
where the intent is to recover, in whole or in part, the
costs of providing goods or services through user
charges.
Restricted funds are used for activities such as
payingodebtserviceordealingwithsolidwaste
collection and disposal. Examples of restricted funds
include the Solid Waste Management Fund, the
Urban Renewal Fund and the Internal Service Fund.
Revenues
The majority of the General Fund revenues support
operation of both executive and legislative branch
departments. It is funded through a variety of
taxes and charges for services, including: property,
income, utility users’, and casino wagering taxes and
proceeds from state revenue sharing payments to the
city. In FY2020, the General Fund received $960.4
million in total revenue, $747.6 million of which came
fromthesevemajorsources(seeChart 1).
FY2023 General Fund revenues are forecasted
to increase 0.87 percent over FY2022 budgeted
revenuesaspandemiceectsonnonresidentremote
work and casino gambling tax revenue continue to
wear o. The conservative forecasts for FY2024
through FY2026 show modest annual growth of
around 2.9 percent.
Revenuefromthevemajortaxsourceshavevaried
over the years with a general downward trend.
However, they have started to trend upward in recent
years and are projected to reach pre-bankruptcy
levels by FY2026.
The COVID-19 pandemic in FY2020 contributed to
the revenue losses. In FY2021, together the ve
primary revenue sources raised $819.3 million,
and are expected to increase 9.3 percent to $895.1
million in FY2022 and 5.4 percent to $943.3 million
in FY2023.
Detroit’s General Fund
Chart 1
General Fund: Revenue Sources, FY2002 to FY2023
Source:CityofDetroitOCFO-OceofBudget
Note: “Other” includes revenues from interest, penalties, fees, assets, permits, licensing, investment earnings, etc.
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
Property Tax Municipal Income Tax Utility Users' Tax
Casino Wagering Tax State Revenue Sharing Other
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
3
Analysis of FY2023 City of Detroit Budget
Property Tax
The city levies property taxes to fund general
operations (19.9520 mills) and to support unlimited
tax debt (9.0 mills). Detroit residents and businesses
also pay overlapping property taxes to retire debt
and to fund a number of entities including the
Detroit Public Library, Detroit Public Community
School District, Wayne County, a number of special
authorities, and the State of Michigan.
Population loss and declining taxable values in the
city have contributed to a steady downward trend in
property tax revenues declining property values have
eroded the tax base, and more structures continue to
be foreclosed and demolished (see Chart 2).
Between FY2007 and FY2018, property tax revenue
dropped by 35.2 percent due in part to the impact of
theGreatRecession.Revenueshavesincebeenat
with small annual variances. Property tax revenues
forFY2022andFY2023areprojectedtoremainat.
Municipal Income Tax
Detroit is one of 24 Michigan cities that levies an
income tax. Detroit’s city income tax rates are the
highest among these cities, with a resident rate of
2.4 percent and non-resident rate of 1.2 percent.
The corporate rate is 2.0 percent. Non-residents
pay income tax on income earned while physically
working in the city.
Income tax revenues totaled $323 million in FY2002.
Between FY2002 and FY2010, because of declining
employment and rate cuts, income tax revenues
dropped 33 percent before exhibiting a steady rise
through FY2019 when it totaled $361 million – an
increase of almost 67 percent from the FY2010
low.
a
However, with the pandemic’s disruptions, tax
revenue fell by 19.7 percent between FY2019 and
FY2020 as workers who typically worked in the city
shifted to remote work from home, thus avoiding city
income tax liability (see Chart 3).
Current forecasts expect FY2022 revenue to drop
$20.9 million (6.6 percent) below FY2021. However,
in FY2023, those estimates are expected to increase
a   Public Act 500 of 1998 provided for reducons of the
Detroit personal income tax rate for resident and nonresi-
dent taxpayers. Beginning with a tax rate of 3 percent on
residents and 1.5 percent on nonresidents in 1999, the law
provided that the resident tax rate be reduced by one-tenth
of a percentage point per year, with the nonresident rate
reset to one-half of the resident rate, over a ten-year period
unl the new rates were 2 percent and 1 percent. However,
as a result of safeguards in Act 500 and amendments to the
Act, the tax rate reducon was suspended. Starng in 2012,
Detroit met only two of the required criteria in Act 500 to
connue to suspend the income tax rate rollback. The Act
was later amended to freeze the process. Therefore, the
targeted rollback was never completed and the income tax
rates remain at 2.4 percent for residents and 1.2 percent for
nonresidents.
Chart 2
Property Tax Revenue, FY2002 to FY2023
Source:CityofDetroitOCFO-OceofBudget
Chart 3
Income Tax Revenue, FY2002 to FY2023
Source:CityofDetroitOCFO-OceofBudget
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
$0
$50
$100
$150
$200
$250
$300
$350
$400
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
4
Analysis of FY2023 City of Detroit Budget
$21.6 million (7.3 percent) above FY2022 estimates
due to adjusted remote work projections.
Recent projections expect the prevalence of remote
work to decrease. Revenue reductions associated
with remote work are now estimated to be most
pronounced in FY2021 and FY2022, but are
expectedtoattenoutmodestlythroughFY2026.
Two types of workers are driving growth in the city’s
income tax revenues. The bulk of employment gains
are expected to come from the blue collar sector
made up of jobs in manufacturing, transportation,
warehousing, and utilities and lower-educational
attainment service jobs in accommodations, food
services, arts, entertainment, and recreation.
1
People
who hold these jobs cannot typically work remotely
due to the nature of the work.
According to the Detroit Economic Outlook report
by the University of Michigan, Detroit has now
recovered four-fifths of its job losses from the
start of the pandemic.
2
The city is expected to
see 27,200 job gains between 2022 to 2026. It
is expected that the job count will return to pre-
pandemic levels in 2023. When the pandemic
hit in 2020, Detroit’s unemployment rate maxed
out at 22 percent but fell to 10 percent in 2021.
Ulity Users’ Tax
Theve percentutilityusers’excisetax produced
about $32 million in FY2021, which is a 38.8
percent decrease from the FY2002 yield. Tax yields
consistently decreased over the last two decades,
much of which is related to population loss. Since
FY2016, revenues for this tax have been growing at
4.6 percent annually (see Chart 4).
Casino Wagering Tax
Detroit is home to three casinos, the only non-tribal
casinos in Michigan. The city’s 10.9 percent tax on
gross wagers at the casinos generated $184 million
in FY2019. Once the pandemic hit and casinos were
forced to close in 2020, FY2020 tax revenue losses
were staggering, reflected in the onsite gaming
numbers for FY2020 and FY2021. FY2021 had the
most pronounced losses in onsite gaming revenue
dropping down to $110 million.
Michigan launched online gaming and sports betting
in2021,whichhelpedtoosettherevenuelosses
from onsite gaming. Between FY2022 and FY2026,
online gaming and sports betting is projected to add
an average of $74.8 million every year. In that same
period, total casino wagering tax revenue is projected
to average about $273.5 million (see Chart 5). Online
gaming brought in $26.6 million in casino wagering
Chart 4
Ulity Users’ Tax Revenue, FY2002 to FY2023
$0
$10
$20
$30
$40
$50
$60
$70
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
Source:CityofDetroitOCFO-OceofBudget
Note: Starting in FY2016, $12.5 million of the utility users’ tax has been dedicated to Public Lighting
Authority bonds.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
5
Analysis of FY2023 City of Detroit Budget
tax revenue in FY2021 and is projected to bring an
additional $71.1 million for FY2022.
State Revenue Sharing
Detroit receives unrestricted revenue sharing from
the state consisting of portions of sales tax revenues
that are constitutionally and statutorily dedicated. For
years, the state’s revenue sharing program has been
reducedsignicantlywithonlymodestgrowthatthe
beginning of the last decade (see Chart 6).
Between FY2002 and FY2012, the city had gradual
annual decreases in the amount of state shared
tax revenue. Revenue sharing dropped by 48.3
percent ($161 million) during this period, dramatically
impacting the city’s bottom line. Between FY2012
and FY2021, state revenue sharing has gradually
increased, rising about 24 percent ($41.3 million)
in total.
The drop in FY2020 was a result of state cuts to
all cities during the annual August revenue sharing
payments, which functioned as a pandemic budget
balancer. However, the state gave municipalities
replacement revenue that exceeded the revenue
sharing cut in the form of a one-time Coronavirus
Aid, Relief, and Economic Security (CARES) Act
grant which was reported outside the General Fund.
Estimates for FY2022 and FY2023 are expected to
remain stable with historical amounts.
Potential Risks and Upsides of Revenue
Forecast
The expected changes in the composition of the
overall workforce in the coming years has caused
the city to adjust its projections for the amount of
remote work that will take place. Contrary to previous
projections, this signals a future that is more similar
to the pre-pandemic era as more of the labor force
will be composed of in-person work.
However, this shift results from white-collar jobs
being replaced with lower-paying, lower-educational
attainment blue collar industry jobs. This workforce
change presents concerns about tax revenue
sustainability. Many lower-educational attainment
and blue collar industry jobs tend to be part-time or
temporary, creating the potential for wage gaps and
smaller income tax collections.
The city is projecting economic growth based
on actions initiated before the pandemic. Big
development projects including the opening of the
Stellantis Mack Avenue Assembly plant, the retooling
of General Motors’ Factory Zero, construction of the
Gordie Howe International Bridge, and Ford Motor
Company’s new Detroit campus bolster blue-collar
employment in the city. This is contributing to the
projected growth in jobs, wages and income tax
revenue.
Chart 6
State Revenue Sharing, FY2002 to FY2023
Source:CityofDetroitOCFO-OceofBudget
$0
$50
$100
$150
$200
$250
$300
$350
$400
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
Chart 5
Casino Wagering Tax Revenue, FY2002 to FY2023
Source:CityofDetroitOCFO-OceofBudget
$0
$50
$100
$150
$200
$250
$300
$350
FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022 Est.
FY2023 Est.
Millions
Onsite Gaming iGaming/Sports Betting
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
6
Analysis of FY2023 City of Detroit Budget
While projections suggest a promising financial
picture for the city’s future and continued recovery of
employment and wage gains, many of the new jobs
coming to Detroit are temporary. For example, many
blue-collar jobs are in construction which are more
likely to go away once a major project is completed.
For income tax revenues to sustain their projected
growth the city will need to see more job growth in
the higher-educational attainment service industries
such as healthcare, nance, biotechnology, and
public administration. These jobs tend to be more
permanent than jobs in lower-educational attainment
service sectors, enhancing long-term growth. More
opportunities in higher-educational attainment
service industries will increase the average wage
gain in the city and create more sustainable jobs for
the city’s economy.
Jobs located in the city may also attract residents,
thus growing the tax base. A return to pre-pandemic
revenue levels is a good sign but the city still has
work to do to develop growth of the tax base and a
non-transient employment base.
Revenue risks also lie in the city’s income tax
revenues as downtown workers continue to work
remotelyduetothepandemic’seectonthework
environment. Expectations around remote work have
changed, impacting income tax revenue projections
in a positive way.
Detroit projects a $53.2 million tax revenue loss this
scalyearfromremoteworkandisprojectinga$35
million tax revenue loss from remote work in the 2026
scalyear,signalingthepermanentchangetooce
work in the city.
On the other hand, recent projections expect the
prevalence of remote work to decrease. According
to the February 2022 report, remote work losses are
estimated to be most pronounced in FY2021 and
FY2022, but are expected to atten out modestly
through FY2026.
3
This is due to the changing
composition in the city’s work force as more blue
collar jobs from high prole development projects
become available.
4
The growth of sports betting and remote gambling
options has provided the city with revenue streams
thathavehelpedtoosetsomeofthetaxrevenue
losses since the pandemic. However, the boom in
tax revenue from online gaming and sports betting
is not guaranteed to persist as changes in gaming
behavior could occur in the future. The online gaming
substitutions for onsite gaming presents an even
bigger risk. As of now it is projected that online
gaming and sports betting will add to existing onsite
casino revenue.
However, another scenario may occur where online
gaming replaces some of the onsite gaming. Patrons
of the casino who normally engage in onsite gaming
may now stay at home and gamble on the computer
instead of physically going to the casino. If a situation
like this happens, the current projections for casino
wagering tax revenue will be too high. This presents
a question about long-term economic sustainability
for the city’s tax revenues.
For all of the investment in major projects in
Detroit, property tax revenue projections are at.
Tax incentives and limitations on growth of the
taxable value of property result in few gains to fund
government services.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
7
Analysis of FY2023 City of Detroit Budget
Chart 7
Total City of Detroit Budget, FY2019 to FY2023
Source:CityofDetroitOCFO-OceofBudget
Table 1
City of Detroit Budget FY2022 and FY2023
(dollars in millions)
Source:CityofDetroitOCFO-OceofBudget
FY2022
(Adopted)
FY2023
(Adopted)
Dollar
Increase
Percent
Change
General
Recurring Budget $1,055.1 $1,146.5 $91.4 8.7
One-Time Budget $83.3 $76.7 -$6.6 -7.9
Total $1,138.4 $1,223.2 $84.8 7.4
Other Funds
Recurring Budget $1,179.5 $1,171.4 -$ 8.1 -0.7
One-Time Budget $20.0 $58.7 $38.7 193.5
Total
$1,199.5 $1,230.1 $30.6 2.6
All Funds
Recurring Budget $2,234.6 $2,317.9 $83.3 3.7
One-Time Budget $103.3 $135.4 $32.1 31.1
Total $2,337.9 $2,453.3 $115.4 4.9
The FY2023 Budget
Approved Budget
The FY2023 budget totals $1.2 billion for General
Fund operations and $2.5 billion across all city funds
(see Table 1).
Compared to the FY2022 adopted budget, the current
General Fund budget is set to increase by 7.4 percent
($84.8 million). The $1.2 billion General Fund budget
includes more than $1.1 billion in recurring funds
and $76.7 million in one-time spending available as
unused balances from the current budget.
The overall city budget can be compared historically
to assess how the city’s fiscal health has been
trending over the years (see Chart 7). The city
budget has increased by 17.9 percent since FY2019.
Budget Highlights
The budget is a reection of the city’s revenue
outlook which continues to improve following two
challenging scal years of revenue losses driven by
the pandemic. Recurring city revenues that make
up the city’s General Fund are forecasted to exceed
pre-pandemic levels.
With the big revenue gains the city is forecasting for
thisupcomingscalyearandfutureyears,thebudget
includes an $89 million increase in recurring funding
over the FY2022 budget. However, most of this
growthreectsrestorationsfrompreviouspandemic
$2,081
$2,330
$2,187
$2,338
$2,453
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
FY2019 Actual FY2020 Actual FY2021 Actual FY2022
Adopted
FY2023
Adopted
Millions
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
8
Analysis of FY2023 City of Detroit Budget
budget cuts. A $67 million increase is spread across
the Department of Transportation, the Police and Fire
Departments, and all other General Fund positions
to restore the city’s budget from pandemic cost-
cutting. Another highlight is a $16 million increase
for city employee salaries, including bus operators
andreghters(seeTable 2).
The city’s $826 million in American Rescue Plan
Act (ARPA) funds add stability to the city’s budget
and financial standing by accelerating projects
to improve the tax base and community well-
being while preserving reserves and resources
that would have otherwise been used to fund
improvements and shortfalls. None of the city’s
funds are being used as revenue replacement
or for recurring expenses which places the city
in a good position to increase its annual budget.
Reree Protecon Fund
Beginning in FY2024, the city will resume annual
pension contributions for its closed and frozen
legacy pension plans per the bankruptcy Plan of
Adjustment. To prepare for this upcoming return to
actuarially based funding of its pension obligations,
the city has been setting aside funds in a Retiree
Protection Fund.
The FY2023 budget includes $60 million in recurring
base funding for the Retiree Protection Fund, up
by $5 million from the FY2022 level. This ongoing
funding is supplemented by an additional one-time
Table 2
Major Funding Changes in FY2023 Budget
(dollars in millions)
Source:CityofDetroitOCFO-OceofBudget
Chart 8
Reree Protecon Fund, FY2018 to FY2023
Source:CityofDetroitOCFO-OceofBudget
General Fund Budget
Replacement of Federal Transit Relief $26.5
Restoration of City Workforce $40.5
Increases in City Employee Salaries $16.1
Retiree Protection Fund
$5
Existing Debt Service $0.8
deposit of $30 million. This deposit will bring the
total balance of the Retiree Protection Fund to $460
million (see Chart 8).
One-Time Spending
In addition to the funding increases adopted in the
General Fund budget, it includes other one-time
items. The city has not used the $826 million in ARPA
scal recovery funds to directlysupport the city’s
annual General Fund budget either in FY2022 or
FY2023. Instead, ARPA funding has been designated
as one-time spending, separate from the ordinary city
budget. Table 3 provides some one-time spending
highlights from the budget, some of which come from
ARPA funding.
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
FY2018
Actual
FY2019
Actual
FY2020
Actual
FY2021
Actual
FY2022
Adopted
FY2023
Adopted
Millions
Balance Base Deposit Supplemental Deposit
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
9
Analysis of FY2023 City of Detroit Budget
The budget allocates $16.4 million for blight
remediation and neighborhood beautification
programs and $49.1 million for maintaining buildings,
parks, neighborhood planning studies, contributions
to the city airport and museums, match grant
funding, property tax over assessments program,
and updating the city’s master plan.
The budget also allocates $3.5 million of increased
funding for the Housing Trust Fund. An additional
$2 million will be allocated for the Property Tax Over
Assessments Program for legacy Detroiters meant
to support residents overtaxed by more than $600
million in the years after the Great Recession. As a
part of that allocation, there is a request to bolster
the program with $4 million more in federal funds.
Rainy Day Fund
Rainy day funds are eectively budget reserves
that help cities prepare for revenue volatility. Rainy
day funds are separate from general operating
funds and account balances. They function almost
like a savings account. Generally, the percentage
of a government’s annual spending that could be
covered by its rainy day fund is viewed as a leading
indicatorofscalhealth.Whilethecitydetermines
that amount of funding that is assigned to its rainy
day fund, Detroit’s city charter requires that it be kept
above 5 percent.
The city expects to have $130 million remaining
from FY2022 that the mayor has suggested to be
appropriated in one-time allocations. One of those
payments will be made towards the city’s rainy day
fund with a deposit of $30.7 million increasing the
balance to $138 million. The city plans to add an
additional $15 million in FY2024 and $5 million in
FY2025, bringing its total reserves to $158 million
(see Chart 9).
Fortunately, during the pandemic the city did not have
to tap into its rainy day fund. The one-time deposits
being made into the rainy day fund will increase it to
over 12 percent of the budget.
A rainy day fund that is equivalent to 12 percent of
Table 3
Supplemental One-Time Funding in FY2023 Budget
(dollars in millions)
City Budget
Rainy Day Fund Deposit $30.7
BlightRemediationandBeauticationPrograms $16.4
Municipal Facilities Improvements $10.0
Parks and Recreation Improvements $10.7
Public Safety, Parks, and General Vehicle Replacements $10.4
Charles H. Wright Museum of African American History $2.7
Detroit Historical Museum $1.5
Coleman A. Young International Airport Improvements $2.3
Match funds leveraging new state, federal, and private grant opportunities $2.0
Neighborhood Planning Studies $2.0
Housing Trust Fund $3.5
Property Tax Over Assessments Program $2.0
Updating the City’s Master Plan $2.0
Source:CityofDetroitOCFO-OceofBudget
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
10
Analysis of FY2023 City of Detroit Budget
thecity’sbudgetisagoodindicatorofscalhealth
and that is promising for the city of Detroit. The big
three credit rating agencies generally favor a rainy
day fund balance equal to 15 percent of the city
budget.
5
This goal does not seem far-fetched based
on where its budget reserve is now.
Thecity’srainydayfundwillbeanimportantbuer
as the city ramps up its spending in future years with
the start of pension contributions in FY2024. Cost
pressure from the restored pension contributions
are expected to push city spending above available
revenue starting in FY2027, reinforcing the need
for contributions to be made to reserves as well as
exercising spending restraint and identifying budget
eiciencies.
Department and Agency Spending
Table 4 provides a breakdown of some of the more
signicantappropriationscontainedintheFY2023
budget by city department and agency.
General Services The General Services Department
Chart 9
Rainy Day Fund, FY2018 to FY2026
will receive a notable 26.1 percent funding increase.
It is in charge of the city’s vehicle eet, forestry
services, vacant lot maintenance, city-owned
building maintenance, and park and recreation center
planning, design, improvements, and programming.
The department directly operates or partners in the
maintenance and improvement of 310 public parks
and 18 recreation centers. Funding for the General
Services Department in the FY2023 budget is $12.1
million (9 percent) above what it was in FY2019.
Operating budget highlights for the General Services
Department include an addition of $1.7 million to
include additional cuts for vacant lots, a $700,000
increase in funding for the Summer Host Sites
program, $1.5 million for park capital maintenance,
and $852,000 for streetscape maintenance to ensure
the city’s new assets maintain a state of good repair.
b
There will also be an additional $1.7 million to keep
b   The Summer Host Sites program procures organiza-
ons around the city to serve as a host for running summer
programming for youth. The City of Detroit seeks out orga-
nizaons as a way to provide more opportunies for Detroit
youth right in their neighborhoods.
Source:CityofDetroitOCFO-OceofBudget
$62
$77
$107 $107 $107 $107
$138
$153
$158
$31
$15
$5
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
FY2018
Actual
FY2019
Actual
FY2020
Actual
FY2021
Actual
FY2022
Adopted
FY2023
Adopted
FY2024
Planned
FY2025
Planned
FY2026
Planned
Millions
Base Balance Deposit
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
11
Analysis of FY2023 City of Detroit Budget
Table 4
Department and Agency Spending (FY2023)
(dollars in millions)
Department FY2022
Budgeted
FY2023
Budgeted
Dollar
Increase
Percent
Change
Executive Agency
Demolition $8.0 $10.7 $2.7 33.8
Public Works $149.2 $151.2 $2.0 1.3
Fire $128.6 $131.9 $3.3 2.6
Civil Rights, Inclusion & Opportunity $5.9 $7.2 $1.3 22
Innovation & Technology $22.6 $35.6 $13.0 57.5
Law $18.2 $22.6 $4.4 24.2
Municipal Parking $10.1 $11.6 $1.5 14.9
Housing & Revitalization $69.9 $65.6 -$4.3 -6.2
Police $341.0 $366.8 $25.8 7. 6
Planning & Development $5.2 $9.3 $4.1 78.8
General Services $116.4 $146.8 $30.4 26.1
Legislative Agency
City Clerk $2.5 $3.1 $0.6 24
Elections $12.3 $14.3 $2.0 16.3
Enterprise Agency
Public Library $27.8 $33.6 $5.8 20.9
Transportation $135.1 $138.9 $3.8 2.8
pacewithcostinationacrossvariousmaintenance
and security contracts and allocation of $11.7 million
to the Blight Fund which will cover vacant lot mowing,
corridortrades,murals,gratiremoval,andDetroit
Land Bank Authority cleanouts.
Fire and Police Both Fire and Police Departments
are set to receive a budget increase. Compared
to FY2022, the Fire Department would receive a
$3.3 million (2.6 percent) increase while the Police
Department would receive a $25.8 million (7.6
percent) increase (see Chart 10).
Operating budget highlights for the Fire and Police
Department include General Fund budget restoration
of personnel funding reduced in the FY2022 budget
andanticipatedincreasesinwages.Policeandre
employees will be allocated $11.4 million for wage
increases and $29 million to restore funding for police
andrepositions.
Overthepastvescalyears,fundingfortheFireand
Police Departments has stayed relatively consistent.
Funding for the Fire Department in the FY2023
budget is $3.1 million (2.4 percent) above what it
was in FY2019. Funding for the Police Department
in the FY2023 budget is $45.1 million (14 percent)
above what it was in FY2019.
Public Works The Department of Public Works
provides environmental and infrastructure services
which are designed to ensure the cleanliness and
safeandecientmobilityofresidents,visitors,and
customers of the city. DPW also provides oversight
and management of solid waste collection activities
performed by private contractors, including citywide
curbside recycling.The Department of Public Works
(DPW) is set to receive a $2 million increase (1.3
percent) under the FY2023 budget. Appropriations
for this department have stayed relatively stable over
thelastvescalyears.Operatingbudgethighlights
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
12
Analysis of FY2023 City of Detroit Budget
for DPW include the addition of $1 million to support
increased participation in trash removal and recycling
hauling.
Innovation and Technology The Department
of Innovation and Technology (DoIT) connects
Detroiters to city government by making sure city
workers have the latest technology to do their jobs
and creating outlets for residents to communicate
with city departments and agencies. The budget
allocates a $13 million increase (57.5 percent) to the
DoIT budget compared to FY2022.
When the pandemic hit, budget cuts reduced funding
to the department. Even with the proposed increase,
funding for DoIT would still be $7 million (16.4 percent)
below what it was in FY2019. Operating budget
highlights include $7.9 million for the consolidation of
existing Police Department information technology-
related funding into the DoIT, and $3.8 million in new
funding for police body camera cloud storage.
Demolion The Detroit Demolition Department was
created after Proposal N was approved by voters
in 2020 to authorize a $250 million comprehensive
plan to address vacant houses in Detroit through
Chart 10
Fire and Police Department Appropriaons, FY2019 to FY2023
preservation ordemolition. It is a continued eort
of the mayor’s blight remediation program. The
Demolition Department is tasked with demolishing
an additional 8,000 blighted homes and preserving
6,000 blighted homes. The Demolition Department
willreceiveasignicant$2.7millionincrease(47.5
percent) over the FY2022 budget amount.
Transportaon The Department of Transportation
(DDOT) will also receive a budget increase of $3.8
million (2.8 percent) compared to the FY2022 budget.
In addition to the budget increase, DDOT will be
receiving contributions from the General Fund that
will help restore the department’s budget to pre-
pandemic levels.
The FY2023 budget allocates $26.5 million to
replace federal transit grants with General Fund
support for DDOT and the People Mover. DDOT will
also leverage $10 million of DDOT’s allocation of
American Rescue Plan Act transit funding to stabilize
service while farebox revenue remains depressed.
There is also an additional $5.8 million increase to
improve Paratransit Service and Vehicle Operations.
DDOT’s operating budget also includes an extra $1
million to support cost increases in the department’s
insurance policy.
$129
$122
$123
$129
$132
$322
$330
$329
$341
$367
$0
$50
$100
$150
$200
$250
$300
$350
$400
FY2019 Actual FY2020 Actual FY2021 Actual FY2022
Adopted
FY2023
Adopted
Millions
Fire Police
Source:CityofDetroitOCFO-OceofBudget
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
13
Analysis of FY2023 City of Detroit Budget
Elections With the upcoming 2022 midterm
elections, the city is allocating 16.3 percent more
funding for elections compared to FY2022. The $2
million increase would cover items including security,
infrastructure, postage, redistricting costs, and
expenses related to the pandemic.
Housing and Revitalization The Housing and
Revitalization Department is responsible for
sustaining and growing neighborhoods that are
inclusiveofqualityaordablehousingopportunities.It
also provides services to city residents by expanding
economic opportunities through management
of federal housing, economic and community
development funding, steering local housing policy,
and maintaining and creating mixed-income and
mixed-use housing opportunities.
While almost every department in the executive
branch is set to receive an increase in funding with
the FY2023 budget, one department is slated to
have a mark down. Comparing the FY2023 budget to
FY2022, the Housing and Revitalization Department
would receive a 6.2 percent decrease in funding.
This department has had funding reduced after the
signicant boost in federal funding it received in
FY2020. Funding for the Housing and Revitalization
Department in the FY2023 budget is $9.9 million (13.1
percent) below what it was in FY2019. The decision
to defund the Housing and Revitalization Department
from General Fund dollars correlates with its ARPA
spending. The city is maintaining overall spending
on these items through funding sources like the
American Rescue Plan Act, Coronavirus Aid, Relief,
and Economic Security Act, and block grants that
areobudget.
About $67 million of ARPA funds is programmed
towards combatting intergenerational poverty that
includehomerepairs,aordablehousing/services,
and homelessness prevention. Another $50.5
million of ARPA money is programmed towards
neighborhood investments that include providing
block club and neighborhood grants, as well as
funding Community Health Corps and services.
These are all services that would traditionally be
funded through the Housing and Revitalization
Department.
Debt Service Debt service payments from the
General Fund increase $900,000 between FY2022
and FY2023. The graph below combines the General
Fund shares of limited tax general obligation debt
service and legacy pension contributions based on
current debt service and the Retiree Protection Fund
funding plan ramp up (See Chart 11).
Chart 11
Debt Service Payments, FY2022 and FY2023
$85
$86
$55
$60
$0
$20
$40
$60
$80
$100
$120
$140
$160
FY2022 Adopted FY2023 Adopted
Millions
GF Debt Service GF Legacy Pension
Source:CityofDetroitOCFO-OceofBudget
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
14
Analysis of FY2023 City of Detroit Budget
The city’s budget took a major hit two years ago
with budget cuts of $350 million as the pandemic
disrupted the economy and dealt unanticipated
revenue losses. The $2.5 billion FY2023 budget is
balanced. It marks a 4.9 percent increase from the
$2.3 billion budget in FY2022. Operating budget
balance is achieved without the use of rainy day fund
reserves or one-time federal COVID-19 relief dollars.
State law requires that local governments’ budgets
be balanced, meaning that projected revenues are
sucienttocoverappropriations.Detroit’sFY2023
budget is balanced based on the best available
estimates of city revenues and spending.
Looking forward into the city’s budget forecast,
however, expenditure growth begins to outpace
revenue growth beginning in FY2027. Future
revenue growth generally continues along revenue
conference trends. This assumes remote work
remains at the favorably adjusted levels that were
estimated during the February 2022 conference and
no material revenue loss from potential substitution
eectsoninternetgamingversusonsitegaming.
As it relates to expenditures, long-term forecasts are
projecting pension costs that are based on FY2021
actuarial valuation projections to be the main driver
that will cause expenditures to outpace revenue
growth in FY2027 (see Chart 12).
Amortization schedules for the General Retirement
Service Fund is 30 years while the Police and Fire
Retirement Service is 20 years (per adopted funding
policy). This budget gap requires remedial action to
maintainscalbalance.
Near term, revenues and expenditures are expected
to be in balance. Beginning in FY2027, annual
revenues are expected to grow at about 1.8 percent
per year, while annual expenses are expected to
grow about 2.5 percent per year. These are all
based on baseline trends and known labor contract
growth, pension contributions, debt service, and
Evaluang the Budget
Chart 12
Baseline Budget Forecast, FY2022 to FY2031
Source:CityofDetroitOCFO-OceofBudget
$1,000
$1,100
$1,200
$1,300
$1,400
FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
$ in millions
Expenditures Revenues
Budget Gap begins in FY27 and
grows. Will require remedial action to
maintainscalbalance.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
15
Analysis of FY2023 City of Detroit Budget
other factors. This translates to a baseline budget
gap of about $11 million in FY2027 that grows about
$10 million larger every year as expenses continue
to outpace revenues.
Current forecasts show a slowly growing decit
starting in FY2027. If revenue projections end up
being accurate, that would mean the city would need
to tap the brakes to slow spending growth from its
currenttrendorndnewrevenuetollthegap.
If revenues perform better than the city’s baseline
forecast then the budget gap would be delayed
by two years and would not develop until FY2029.
Potential revenue upsides include revenue gains
from development projects that are underway,
proposed state revenue sharing increases, and state-
shared marijuana excise tax revenues. Under a more
pessimistic scenario, the budget gap would occur
immediately;assoonasnextscalyear.Downside
revenue risks assumes 30 percent nonresident
remote work persists and a 10 percent onsite gaming
gap versus pre-pandemic levels. This would require
the city to take immediate action to maintain a
balanced budget.
Annual Pension Contribuons
The contributions from the city’s General Fund that
will come due once again in 2024 for its two pension
funds is a looming challenge. Required contributions
to police and re retiree pensions challenged the
city’s budget before its 2014 bankruptcy agreement.
After a brief respite, required payments still loom
over its future. Part of Detroit’s historic bankruptcy
agreement included a debt-cutting plan and a nine-
year break from dealing with most of the pension
related debt; instead, those pension costs were
met through contributions from private parties and
the State of Michigan, part of the Grand Bargain
agreement that followed the city’s bankruptcy. That
reprieve is almost up.
To prepare for a return to full actuarially-determined
pension funding, the city has been annually
increasing its budget allotment for pensions. Instead
of funding payments to pension plans, however, the
city began making deposits into a Retiree Protection
Fund established in 2018 to function as a savings
accounttohelpcushiontheblowofthepensioncli,
dedicating hundreds of millions of dollars to tackle
the upcoming pension payments. This would allow it
to meet required payments through a combination of
increasing payments from the General Fund budget
and draws on the Retiree Protection Fund.
Under the FY2023 budget, the Retiree Protection
Fund will now have a total of $460 million available
forfuture pension payments.The rst payment in
FY2024 is projected to be $135.4 million. Once
the Retiree Protection Fund is depleted, all future
pensions costs become a General Fund cost to the
city. The larger the required contribution, the more it
willhurtthecity’sabilitytoaordotherongoingcity
services. It is important to note that none of the city’s
$826 million ARPA allocation can be used to fund
pension contributions.
Pension Amorzaon Period
Additional risks to the Four-Year Financial Plan
include the amortization period that is currently used
for legacy pension obligations. Under current funding
policy, the unfunded accrued liabilities of the Police
and Fire Retirement Service Fund are spread over a
20 year period and the General Retirement Service
Fund over a 30 year period.
The plan of adjustment provided for a 30-year
amortization period. The Police and Fire Retirement
System Board adopted a 20-year payment schedule.
The Board has the ultimate authority to make such
a decision. It did so because it found it was the best
move to ensure the solvency of the pension funds.
This change in pension funding, however, drastically
increases the city’s costs on the front end.
The mayor is considering going to bankruptcy court
to litigate over the 20-year amortization schedule
for the Police and Fire Retirement Service Fund in
hopes to return to a 30-year amortization schedule.
Spreading legacy pension costs over a shorter 20-
year time horizon means higher upfront annual costs
for the city. For example, the city’s pension forecasts
that incorporate lower investment returns and a
20-year amortization period for both the Police and
Fire Retirement Fund and the General Retirement
Services Fund estimate that these factors would
increase the annual legacy contribution by $25 million
to $160 million. That would exacerbate the future
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
16
Analysis of FY2023 City of Detroit Budget
budget gaps discussed in the previous section and
exhaust the Retiree Protection Fund sooner. This
could result in potential budget cuts. A 20- versus
30-year payment schedule is important because of
the major impacts it could have on the city’s bottom
line, its ability to spend on services for businesses
and residents in the future and the pension systems
that serve retirees.
Inaonary Impacts on the Economy and
the Ukrainian War
While the city is projected to see promising job and
wage gains driven by blue-collar jobs and service
industry jobs, the impacts of ination on income
growth still looms over as a threat to the city’s
budget.Initially,thesharpuptickofinationduring
the pandemic was expected to moderate as the
COVID-19 recession receded, but ongoing supply
chain disruptions and higher input costs have pushed
localinationto8.5percentyear-over-yearinMarch.
As the economy adjusts to a post-pandemic
landscape, the higher ination reects lingering
price pressures that may impact the budget and
thecity’seconomicforecast.Highinationimpacts
government expenditures more than it does
government revenues. This may have implications
on the city budget.Additionally, ination impacts
consumerbehaviorwhichmayhaveadverseeects
on how consumers spend and the amount of state
sales tax revenue. This could also have impacts on
state revenue sharing that the city receives, in turn,
impacting the city’s budget and economic forecast.
In addition, the Federal Reserve has already signaled
it will increase interest rates to try to help contain
thegrowingination.Higherinterestrateswilllikely
dampen economic growth at least in the short run.
Slower economic growth means a greater probability
of slower revenue growth as well.
Inationhasbeenexpectedtoriseabitintherst
quarterof2022,tailofortherestof2022andthen
gradually moderate to the mid-2 percent range until
2026.
Inflationary impacts on the economy may be
exacerbated by the war in Ukraine. Russia is the
largest natural gas exporter in the world and their
invasion of Ukraine has led to uncertainty in that
market, which has increased demand. Gas prices
have increased signicantly since the startof the
war, and this is happening in tandem with the rising
pricesfromination.Thetwofactorsactingtogether
couldhaveamorepronouncedeectonconsumer
behavior and government spending.
In addition, the Ukrainian War is having adverse
eectsonthecontinuingsupplychaindisruptions.
Michigan automakers are reliant on computer chips,
of which there is a continued shortage of now.
The shortage of computer chips could continue as
semiconductor plants deal with cutbacks in Ukrainian
supplies of the neon needed for lasers. Carmakers
will also be affected from the higher prices for
palladium used in car manufacturing as it is a major
Russian export.
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
17
Analysis of FY2023 City of Detroit Budget
The FY2023 City of Detroit budget has been lauded
as a “return to normal” budget restoring the pre-
pandemic status quo and managing risks with
contributions to reserves and spending restraint.
When the pandemic struck, the mayor outlined
nearly $350 million in pandemic-related spending
cuts to maintain a balanced budget without laying
oanyfull-timecityemployees.Sincethen,thecity
has seen revenue growth beyond initial projections
and appropriated funds in the new FY2023 budget
are set to restore all pandemic-related budget cuts.
The FY2023 General Fund budget includes
increases in recurring expenses as well as one-
time spending items. The FY2023 budget makes
targeted investments in key areas of the city such
asbeautication,transit,cityreserves,andpension
funds. It also aims to restore the pre-pandemic
status quo budget as the economy and revenues
of the city continue to recover post pandemic. The
FY2023 budget manages risks by making concerted
contributions to reserves and employing spending
restraints. As it stands, the budget is balanced
because of the city’s conservative nancial and
economic forecasts that are a result of strong
institutionalframeworksandstrongscaldiscipline
supported by policies, transparency, and action.
Thesescalpracticeshaveproventoworkthusfar
to keep the city solvent in the post-bankruptcy era.
In addition, a few items are providing substantial
relief for the FY2023 and the upcoming FY2024
budget.Therstisthedropintheestimatedincome
tax remote work loss which has been projected to
decrease from 30 percent to 20 percent ongoing. And
second, the actuarially set hybrid contribution rates
have decreased from about $186 million a year to
about $135 million a year. These factors place the city
inafavorablepositionnancially.Andwithrevenue
estimates projecting to exceed pre-pandemic levels,
the city’s FY2023 budget will prove to be sustainable.
Two of the major credit agencies – Moody’s and
S&P Global – that provide bond assessments for
cities’ credit ratings raised Detroit’s credit rating
giving the city its fth such boost in seven years.
The bond rating system is a measurement of the
quality of the city’s debt or how likely it is to repay
that.Itisaproxyofthecity’soverallnancialhealth
functioning as an important indicator of the city’s
status post-bankruptcy. Moody’s upgraded Detroit’s
credit rating to Ba2 designating a positive outlook for
the city.
6
S&P Global upgraded Detroit’s Unlimited
Tax General Obligation bond debt to BB from BB-,
also designating a positive outlook.
7
TheseupgradesreectDetroit’sgrowingrevenues
and improved budget position, sustained reserves,
and overall nancial exibility from supplemental
federal and state funding. Both upgrades emphasize
the improving fundamentals in Detroit’s economy
which indicates that the city’s budget is estimated
to be sustainable in the coming years.
While the approved FY2023 budget is balanced,
there is still a question about the long-term structural
sustainability of the budget. The city’s long-term
baseline expenditure forecast is predicted to
outpace forecasted revenue growth beginning in
FY2027. In addition, much of the spending the city is
undergoing related to improvements in infrastructure,
neighborhoodbeautication,andaddressingequity
issues are coming from one-time contributions.
Structurally, this creates a potential problem for the
city’s future because one-time contributions do not
account for service needs that will need to continue
to be funded once those one-time expenditures are
exhausted. The city’s revenue baseline will have a
hard time sustaining expenditures in the future that
will require more government spending to maintain
new infrastructure, personnel and services. In
addition to the pension contribution payments that will
resume in FY2024, the city has to continue growing
its tax base to increase city revenues in a manner
that will sustain new, acquired expenditures or use
more restraint when considering new expenditures
to live within realistically expected revenues.
Conclusion
Lorem ipsum dolor sit amet, consectetur adipiscing elit. Maecenas ultrices mi velit, sit amet malesuada elit venenatis et.
Sed condimentum sodales justo, a molestie tortor mattis ut. Cras ornare rutrum lorem, a auctor sem hendrerit ac.
Quisque auctor eros eu dui pretium condimentum in in leo. Phasellus interdum tellus in elementum maximus. Quisque
ut condimentum nulla. Nunc lorem ligula, vehicula id pretium ut, gravida sit amet nunc.
Nam gravida turpis a nulla vehicula fringilla. Nam a luctus augue, nec ultrices est. Proin a feugiat massa, id vulputate
metus. Mauris id lacinia elit, et lobortis sem. Sed quis diam pulvinar, egestas urna at, mattis odio. Phasellus bibendum
nulla vitae maximus imperdiet. Vestibulum ac quam volutpat, commodo enim id, molestie tortor. Morbi dapibus dapibus
ornare. Pellentesque quis massa tellus. In interdum in lacus nec fermentum. Nullam ullamcorper euismod justo at
dictum. Phasellus aliquet ultrices dolor, vel tempor diam convallis quis. Vestibulum hendrerit dignissim enim nec
dapibus. Integer volutpat congue tincidunt. Vestibulum sed nunc leo.
Morbi sed sapien vitae urna pretium dignissim eu at sapien. Aliquam eu nisl volutpat, commodo mauris sed, pharetra
ante. Nulla lobortis lectus ac sem imperdiet, at fringilla ante commodo. Aliquam sed ullamcorper nisl. Nullam sollicitudin
dolor purus, nec cursus mauris mattis quis. Pellentesque consectetur tellus vel nisi elementum volutpat. Suspendisse
sed dolor sit amet libero tincidunt congue. In egestas libero neque, vel cursus dui blandit vel.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Aliquam erat volutpat. Sed imperdiet augue sit amet eros rhoncus egestas. Mauris mauris nunc, scelerisque eu dapibus
nec, hendrerit a dolor. Duis vel nisl porttitor, dictum nulla id, molestie lacus. Nulla vehicula placerat justo, vel semper
metus luctus sed. Cras blandit ultrices ipsum sed facilisis. Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam
ut quam ut lorem rutrum cursus non sed massa. Nunc sed sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare
vehicula ante.
Quisque sit amet venenatis eros. Nulla vulputate pulvinar mauris. Vestibulum pulvinar erat varius sem vestibulum, at
tristique nisl dapibus. Morbi hendrerit nisi malesuada, feugiat justo vitae, sagittis orci. Nam quis laoreet quam, a
faucibus risus. Morbi egestas molestie odio quis elementum. Suspendisse iaculis nisi id risus vehicula convallis. Donec
tincidunt congue fringilla.
Maecenas varius eros orci, sed mollis arcu finibus eu. Nullam ut quam ut lorem rutrum cursus non sed massa. Nunc sed
sollicitudin orci. Integer libero tellus, iaculis in orci ut, ornare vehicula ante.
Official Research Paper
Lorem Ipsum Research Paper Title
Lorem Ipsum Sub-Heading
115 West Allegan Suite 480 | Lansing, MI 48933 | crcmich.org pg. 1
18
Analysis of FY2023 City of Detroit Budget
1
Ehrlich, G. M., Fulton, G. A., & Hymans, S. H.
(2022). City of Detroit-University of Michigan
Economic Analysis Partnership. LSA Research
Seminar in Quantitative Economics University
ofMichigan.https://lsa.umich.edu/content/dam/
econ-assets/Econdocs/RSQEPDFs/RSQE_De-
troit_CREC_Slides_(2022.02).pdf.
2
Ehrlich, G. M., Fulton, G. A., & Hymans, S. H.
(2022). City of Detroit-University of Michigan
Economic Analysis Partnership. LSA Research
Seminar in Quantitative Economics University of
Michigan.https://lsa.umich.edu/content/dam/econ-
assets/Econdocs/RSQEPDFs/Detroit_Forecast_
Update_(2022.02).pdf.
3
OceofBudget,RevenueEstimatingConfer-
ence - February 18, 2022 (2022). City of Detroit.
https://detroitmi.gov/sites/detroitmi.localhost/les/
events/2022-02/Feb%202022%20Detroit%20
REC%20Presentation.pdf.
4
Ishag-Osman, E. N. (2021, November 5). Improv-
ing Financial Picture Shows Promise for the City’s
Future. Citizens Research Council of Michigan.
https://crcmich.org/improving-nancial-picture-
shows-promise-for-the-citys-future
5
Frank, A. (2022, March 10). Moody’s gives De-
troit’s Credit Rating Another Boost. Crain’s Detroit
Business.https://www.crainsdetroit.com/govern-
ment/moodys-gives-detroits-credit-rating-another-
boost
6
City of Detroit. S&P upgrades Detroit’s rat-
ing, marking the second upgrade in a week and
highlighting strengthening credit. City of Detroit.
https://detroitmi.gov/news/sp-upgrades-detroits-
rating-marking-second-upgrade-week-and-high-
lighting-strengthening-credit#:~:text=S%26P%20
Global%20Ratings%20has%20raised,outlook%20
and%20strong%20scal%20management
7
Oce of Budget.CityofDetroit.https://detroitmi.
gov/departments/oce-chief-nancial-ocer/ocfo-
divisions/oce-budget
Endnotes