City of Detroit reports revised revenue estimates for Fiscal Years 2026-2030

• City's revenue outlook steadily improves as wagering tax revenue continues to grow

• The September recurring General Fund revenue estimates total $1.41 billion in the 2026 Fiscal Year, down $27.1 million from the February 2025 conference estimates. Corporate income tax was the main driver in the lower expected revenue

• Forecast: growth in Detroit resident wages outpace the State's

On September 22, the City of Detroit held its regular biannual Revenue Estimating Conference to receive an update on the Detroit economic outlook and to approve revised economic and revenue forecasts for the remainder of fiscal year 2026 and for fiscal years 2027 through 2030. State law requires the City to hold independent revenue conferences in September and February each fiscal year to set the total amount available for its annual budget and four-year financial plan.

The Detroit Economic Outlook for 2024-2030, released in August, projects Detroit will see an increase in jobs, wages and resident employment in the next five years. The forecast is prepared by the City of Detroit University Economic Analysis Partnership, which is a collaboration of economic researchers from the City, Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan.

The City's revenue outlook while down compared to February estimates, shows continued growth in the major areas including wagering tax and property tax revenue. For the September Revenue Conference, participants have revised revenue estimates for the recurring General Fund from $1.43 billion to $1.41 billion for fiscal year 2026.

Preparing for challenges ahead: City in process of creating Corporate Income Tax Reserve Fund for Fiscal Year 2026

This month Mayor Duggan proposed using a portion of the fiscal year 2025 $60M surplus to create the Corporate Income Tax Reserve Fund to fill the gap of revenue decreases stemming from the impact of tariffs on manufacturers and changes in the federal corporate income tax code as part of the "One Big Beautiful Bill Act." The mayor recommends $42 million of the surplus go towards the reserve fund pending City Council approval.

Chief Financial Officer Tanya Stoudemire says, "the $42 million would cover a potential $16 million loss in corporate income tax revenue and a potential $26 million decrease in corporate income tax from Detroit manufacturers affected by tariffs." Stoudemire adds that the new $42 million Corporate Income Tax Reserve Fund would be in addition to:

• $150 million Rainy Day Fund

• $280 million Retiree Protection Fund

• $71 million Risk Management Fund

TOTALING: $544 million

CFO Stoudemire says the $60 million surplus is a conservative estimate and the final number is likely to increase before the audit of the 2024 fiscal year budget is completed at the end of the year. The rest of city tax revenues she says are continuing to come in on target.

Forecast: moderate growth for payroll jobs, while Detroit wages outpace the State

Over the forecast period, Detroit payroll jobs are expected to grow, and Detroiters' wages will climb at a faster pace than the State's. "We remain upbeat about the trajectory of wages and salaries in Detroit. Wage growth at jobs located in the city averages 3.2 percent per year from 2025 through 2030, faster than statewide. Wages of city residents outstrip both city and statewide payroll wages, growing at an average annual rate of 3.6 percent. After adjusting for local inflation, we are forecasting that Detroit residents' average real wages will climb to 4.9 percent higher in 2030 than in 2019. Although that growth may seem modest, it outpaces the growth in average real wages at Michigan and Detroit establishments" said Gabriel Ehrlich, Director, University of Michigan Research Seminar in Quantitative Economics and lead author of the forecast.

Additional highlights in the forecast:

Detroit is expected to add an average of 1,500 payroll jobs per year during the forecast period, an annual growth rate of 0.6%

Detroit's population climbed 1.7% over 2022-24, faster than the state's overall rate of 0.9%. The city had the fourth-fastest growth over the past two years of all large cities in the Midwestern Great Lakes region, outpacing Pittsburgh, Chicago, Cincinnati, Indianapolis and Minneapolis-St. Paul.

Revenue Estimating Conference Results

The Revenue Conference reported FY2026 General Fund recurring revenues projected at $1.41 billion for the current fiscal year ending June 30, 2026, down $27.1 million from the previous conference estimate in February 2025. The decrease is driven by corporate income tax which saw reductions in the fiscal year ending June 30, 2025 due to lower taxable income. On the contrary, wagering tax revenues are expected to be an additional $23.4 million compared to the previous conference estimate in February 2025.

General Fund recurring revenues for FY2027, which begins July 1, 2026, are forecasted at $1.423 billion, a decrease of $45.9 million over the previous conference estimate in February 2025. This lower projection is due to expectations stemming in part from the One Big Beautiful Bill Act. The out-year forecasts for FY2027 through FY2030 show continued overall revenue growth of about 2% per year.

The City will use the estimates approved today to begin developing the City's FY2027 Budget and FY2027 through FY2030 Four-Year Financial Plan. The conference will meet again to approve revised revenue estimates in February 2026. The voting conference principals are Tanya Stoudemire, the City's Chief Financial Officer; Eric Bussis, Chief Economist, Director, Office of Revenue and Tax Analysis, Michigan Department of Treasury; and George A. Fulton, PhD, Director Emeritus, Research Professor Emeritus, Research Seminar in Quantitative Economics (RSQE), Department of Economics, University of Michigan.

Recurring General Fund Revenue Estimates

To review past Revenue Estimating Conference Reports visit Revenue and Economic Reportson the Office of Budget's website.

• September 2025 Revenue Conference - Detroit Economic Outlook Slides

• September 2025 Revenue Conference - Revenue Estimate Slides

• Revenue Estimates Conference Zoom Meeting Recording