Mayor: Fiscal Year 2025 Budget provides a more Vibrant, Safe, and Sustainable City for Detroiters

Mayor Mike Duggan delivers his Proposed FY2025 Budget and FY2025-2028 Four-Year Financial Plan to the Detroit City Council
Keeping promise to retirees, the budget increases pension funding by $40 million over last year and $170 million over two years ago, including $20 million for an accelerated pension fund payment schedule
Dedicated funds in FY2025 budget for $10 million one-time supplemental retirement checks, and $10 million toward active employee retirement benefit enhancement
Balanced Budget prioritizes funding for a more vibrant, safe, and sustainable City for Detroiters, including a $21.6 million budget increase for DDOT to hire an additional 117 bus drivers on top of the 111 vacancies DDOT is filling now

Mayor Mike Duggan presented his Proposed Fiscal Year 2024-2025 Budget and Fiscal Years 2025-2028 Four-Year Financial Plan to the Detroit City Council today. It is Detroit’s 11th consecutive balanced budget since exiting bankruptcy in 2014. The proposed budget totals $1.46 billion for General Fund activities and $2.76 billion across all City funds for the coming fiscal year beginning July 1, 2024. It builds on the Mayor and the City Council’s continued collaboration to set a fiscally sustainable course for Detroit.

The proposed budget supports our highest priorities including additional funding for City retirees, police, fire, and DDOT services, and preventing homelessness, all of which help make Detroit a more vibrant, safe, and sustainable city.

Since exiting bankruptcy, the City has invested billions of dollars in service restorations, capital reinvestments, and blight removal. The Administration’s strategies continue to grow the economy and tax base, delivering good-paying jobs, economic opportunity, and quality of life improvements for Detroiters. We have built up financial reserves, including $455 million deposited into the Retiree Protection Fund and $150 million into the Rainy Day Fund, ensuring that neither our retirees nor our budget will be at risk. In last year’s budget, the City resumed making ongoing and fiscally sustainable annual pension contributions.

Revenues have recovered from the pandemic and grown. With the revenue rebound from the pandemic behind us, we have returned to a normal budget process with steady and stable growth and prudent spending decisions to make, like other flourishing cities in America. The FY25 proposed budget is balanced, despite pressure to keep up with current services and competitive wages.

Promises kept while maintaining a balanced budget

Through this budget, the City keeps its promises to retirees by increasing retirement funding by $40 million over last year and $170 million over two years ago, including $20 million for an accelerated pension fund payment schedule, $10 million for proposed one-time supplemental retirement checks, and $10 million toward active employee retirement benefit enhancements. The accelerated payment schedule will provide additional stability for our pension funds paying out current retiree benefits.

The budget also proposes nearly $189 million for the Detroit Department of Transportation (DDOT), including $114 million from the General Fund, and represents a total $21.6 million increase. The increase includes 627 bus drivers, an increase of 117 over the previous year’s budget, as well as the pay raises approved in January 2024. DDOT is supported by a combination of City tax support, state and federal funds, and fare revenue.

Overall, the General Fund budget grows by $141 million over last year's budget, including a $103 million increase in recurring expenditures and a $38 million increase in one-time expenditures. The recurring budget growth represents continuation of current services and more past promises kept, including:

$28 million for salary and benefits growth across departments
$26 million for debt service and legacy pensions based on an accelerated payment schedule that provides additional stability for our pension funds
$18.6 million for the Detroit Police Department, including current services growth from strong recruitment and retention, additional Neighborhood Police Officers and crisis intervention team members, and the new Transit Police division shifted from the People Mover
$10.8 million for various contractual operating costs, including technology services and public safety equipment
$8 million for Detroit Fire Department, including current services growth for fire suppression and emergency medical services expansion
$5.2 million in tax support for the enhanced trash collection contracts
$4.2 million for facilities management consolidation shifted from other funds
$2.1 million for Elections implementation of Proposal 2 and early voting expansion

With limited capacity for new recuring spending, the budget supports targeted new investments, while maintaining a balanced budget, by reallocating $19 million in savings from various City departments based on previous under-spending. That $19 million supports the following:

$10 million for more competitive active employee retirement benefits
$5 million for homelessness services to provide safe and stable support for the most vulnerable
$2 million increase, for a total of $7.5 million, for the workforce investments fund to support competitive wages in hard-to-fill City jobs
$1 million for Public Lighting Authority repair and response to street light outages
$1 million to enhance the City’s cybersecurity preparedness and response

This proposed budget also includes $101 million in one-time investments, across all funds, supported by prior year surplus and one-time revenues, as follows:

$20 million for capital improvements to City facilities, parks, and neighborhood assets
$17.5 million for cleanup on freeways, alleys, commercial corridors, and land bank properties
$15 million for blighted properties ordered demolished
$14 million for Police overtime to support extra patrol and surge coverage
$10 million for a one-time supplemental benefit for legacy retirees
$4.5 million for Motor City Match and Grow Detroit’s Young Talent
$4 million for Elections expanded presidential cycle turnout and Proposal 2 implementation
$3 million for Fire/EMS overtime to support new recruit transition
$2.8. million for the Affordable Housing Development and Preservation Fund, on top of $350,000 in recurring budget
$8 million for various other one-time expenditures

In addition, the Administration is proposing one-time Fiscal Year 2024 supplemental appropriations totaling $115 million to support Risk Management ($60 million), capital improvement projects ($34.2 million), demolition ($13 million), and solid waste fund tax support ($7.8 million).

“The budget I’m presenting today is the result of a $200 million growth in income tax we have earned together,” said Mayor Mike Duggan. We are financially strong, and many of the development projects that have caused this growth in revenue were approved with some controversy. The success we are having today is the direct result of the courage of City Council showed in approving these developments, and our hard work together over the past ten years.”

"This FY24 budget represents promises kept to residents, employees, and our retirees. This consecutive balanced budget is a result of the commitment, discipline, and tenacity involved in the collaborative work by City Council and the Mayor over time. The hard work done to build an economic base has allowed the City to weather a pandemic, to assure services to City residents that protect and improve their opportunities, and to assure financial stability. These past efforts have allowed the presentation of a balanced budget and provides fiscal stability needed for the continued growth of the City,” said Rising.

City Council will hold Budget hearings for departments starting Monday, March 11, which are open to the public. Additional details are available at detroitmi.gov/budget.

The Proposed Budget is for Fiscal Year 2024-2025, which starts July 1, 2024, and ends June 30, 2025.  It was informed by multiple rounds of Public Engagement, including the Annual Public Budget Meetings in October, Community Budget Priorities Forums held with each City Council District in October and comments submitted to the [email protected] inbox.

FY 2025 Mayor's Proposed Budget Presentation to City Council