City of Detroit Reports Revised Revenue Estimates for Fiscal Years 2022-2026

City of Detroit Reports Revised Revenue Estimates for Fiscal Years 2022-2026

UM continues to predict Detroit’s economy is coming back faster than expected, and employment data suggests a growing labor force offers opportunities for acceleration in employment levels.
The successful reopening of the casinos and the new internet gaming activity have helped stabilize the City’s four-year revenue forecast as employment recovers in the City.
The forecast also shows the return on past efforts to create good-paying jobs in the City of Detroit; an effort which our plans for investing in the American Rescue Plan Act recovery funds will magnify.

DETROIT - On September 15, the City of Detroit held its regular biannual Revenue Estimating Conference to receive an update to the Detroit Economic Outlook for 2020-2026 and approve revised economic and revenue forecasts for the remainder of fiscal year 2022 and for fiscal year 2023 through fiscal year 2026. State law requires the City to hold independent revenue conferences in September and February each fiscal year to set the total amount available to be budgeted for the next four years.

The Detroit Economic Outlook for 2020-2026, which was previously released in August, reports that Detroit’s employment recovery from COVID is exceeding expectations. The forecast is prepared by the City of Detroit University Economic Analysis Partnership, which is a collaboration of economic researchers at Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan.

Revenue Outlook Improving

The City’s revenue outlook is improving following two challenging fiscal years of revenues losses driven by the economic impact of the pandemic, nonresidents working remotely, and casino closures and capacity restrictions.

The increase is significantly related to the addition of new internet gaming and sports betting taxes, which were launched in late January. These gains will help offset the expected continuation of reductions in City income tax revenues from nonresidents continuing to work remotely through hybrid work models or full-time remote work. Without the new gaming revenue, the City’s revenue forecast would still be below pre-pandemic levels.

The ongoing pandemic and its lasting effects remain substantial risks to the economic and revenue forecasts approved today. However, the City’s ongoing efforts to attract major employers and provide Detroiters with opportunities for good-paying jobs provide potential revenue upside to the forecast as well.

"This increase in our revenue base is evidence of a resilient economy in Detroit. As we implement our plan to invest federal pandemic recovery funds to bolster Detroit’s future and as we maintain financial responsibility for our budget, the City will strengthen its structurally balanced four-year financial plan,” said City of Detroit Chief Financial Officer, Jay Rising.

Revenue Estimating Conference Results

The Revenue Conference reported FY2022 General Fund revenues projected at $1.106 billion for the current fiscal year ending June 30, up to $111 million (11.2%) from the previous conference estimate in February 2021 but up only $10.5 million (1.0%) from pre-pandemic estimates from February 2020.

General Fund revenues for FY2023, which begins next July 1, are now forecasted at $1.118 billion, an increase of $11.7 million (1.1%) over the revised FY2022 estimates. The conservative General Fund revenue forecasts for FY2024 through FY2026 show continued modest revenue growth of around 1.3% per year.

The City will use the estimates approved today to begin developing the City’s FY2023 Budget and FY2023 through FY2026 Four-Year Financial Plan. The conference will meet again to approve revised revenue estimates in February 2022. The voting conference principals included Jay B. Rising, the City’s Chief Financial Officer; Eric Bussis, Chief Economist, Michigan Department of Treasury; and George A. Fulton, PhD, Director Emeritus, Research Seminar in Quantitative Economics, University of Michigan.

To review past Revenue Estimating Conference Reports visit Financial Reports under Revenue Estimating Conference Reports section.