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Today, the Demolition Department announced its 3,000th property demolition milestone, powered by Proposal N, the City of Detroit’s bond-funded blight removal program. The program was approved by voters in 2020 and is making a significant impact in neighborhoods that once felt left behind. The department is on-track to demolish 8,000 blighted homes across the city.

"Thanks to voters approving Proposal N, our blight removal program is able to do what we could not under federal funding restrictions, which is to reach every neighborhood in the city," said Mayor Mike Duggan. "Days like today are important to let residents know that while we weren't able to reach their neighborhood until now, they were never forgotten. We're going to keep moving through the city removing the homes that can't be saved and preserving the ones that can until we have addressed every blighted vacant home."

To date, the Demolition Department has utilized $63 million in bond funding to demolish 3,000 properties and stabilize over 1,300 for sale. Post-demolition, vacant side lots are available for residents to purchase for $100 through the Detroit Land Bank Authority.

“We made a commitment to remove blight across the city, and we're delivering on that promise,” shared LaJuan Counts, Demolition Department Director. “Proposal N funds have allowed us to move more efficiently and create jobs for Detroit-based, minority-owned contractors but most importantly opportunities for residents of our great city.”

This morning, lifelong Detroiter Patricia Carter watched with great relief as one of the Demolition Department’s Detroit-based, minority-owned contractors, DMC Consultants, demolished and cleared a vacant home that has stood for years in the Oakman Boulevard Neighborhood.

“I’ve lived in this neighborhood for fifty-four years,” said Carter, who serves on the Oakman Boulevard Community Block Club. “I’ve seen what some of my neighbors have done with the vacant lots after the houses were knocked down – they’ve really dressed them up. I’m very happy to see more of the demolition around here.”

City of Detroit Reports Revised Revenue Estimates for Fiscal Years 2023-2027

• City’s revenue outlook continues to improve, thanks to strength of income tax and continuing efforts driving economic opportunity and growth for Detroiters

• Economic effects from the pandemic and future gaming behavior remain risks to the revenue forecast

• Additional development projects throughout Detroit could bolster more robust levels of revenue growth.

DETROIT - On September 12, the City of Detroit held its regular biannual Revenue Estimating Conference to receive an update to the Detroit Economic Outlook for 2021-2027 and approve revised economic and revenue forecasts for the remainder of fiscal year 2023 and for fiscal year 2024 through fiscal year 2027. 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 2021-2027, which was previously released in August, shows the City’s economy holding up in the face of national economic headwinds, as development projects in Detroit and pent-up demand in the auto industry prove to be major drivers in the City’s ongoing economic recovery. The forecast is prepared by the City of Detroit University Economic Analysis Partnership, which is a collaboration of economic researchers between the City, Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan.

Revenue Outlook Continues to Improve

The City’s revenue outlook continues to improve, thanks to the strength of our income tax and our continuing efforts driving economic opportunity and growth for Detroiters. The Revenue Conference has once again approved higher revenue estimates based on our stronger collections concluding the previous fiscal year, Detroit's continued economic growth and stability, and revenue sharing increases provided in the State Budget enacted in July. Income taxes continue to drive revenue growth in future years as well, in line with the City’s economic forecast and despite an ongoing loss from nonresidents expected to continue working remotely through hybrid work models. Economic effects from the pandemic and future gaming behavior remain risks to the revenue forecast. However, the City’s efforts to attract major employers and provide Detroiters with opportunities for good-paying jobs provide potential revenue upside to the forecast. Additional increases in revenue sharing from the State of Michigan could provide potential upside as well.

“The improved revenue outlook is further indication that the City’s efforts to spur economic growth-by attracting new businesses, creating opportunities for Detroiters, improving public safety and beautifying neighborhoods are working despite the pandemic and its lingering consequences,” said, Jay Rising, Chief Financial Officer, City of Detroit.

Revenue Estimating Conference Results

The Revenue Conference reported FY2023 General Fund recurring revenues projected at $1.187 billion for the current fiscal year ending June 30, up $41 million (3.6%) from the previous conference estimate in February 2022. The increase is driven by our growing income and property tax base and revenue sharing increases provided by the State of Michigan. Internet gaming continues to provide additional revenue stability in the face of weaker on-site gaming activity.

General Fund recurring revenues for FY2024, which begins July 1, are now forecasted at $1.214 billion, an increase of $27 million (2.3%) over the revised FY2023 estimates. The projected increase is driven by income taxes, as the local economy continues to recover and grow. The conservative General Fund revenue forecasts for FY2025 through FY2027 show continued, but more modest, revenue growth of less than 2% per year. Additional development projects throughout Detroit could bolster more robust levels of revenue growth.

The City will use the estimates approved today to begin developing the City’s FY2024 Budget and FY2024 through FY2027 Four-Year Financial Plan. The conference will meet again to approve revised revenue estimates in February 2023. The voting conference principals are Jay B. Rising, 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.

· September 2022 Revenue Conference – Detroit Economic Outlook Slides

· September 2022 Revenue Conference – Revenue Estimates Slides

· Link to Zoom recording of September 2022 Revenue Conference 

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

• S&P upgrades Detroit Unlimited Tax General Obligation debt to BB from BB- and upgrades Priority-Lien debt rating to BBB- from BB+, both with positive outlooks 
• The upgrade reflects Detroit’s growing revenues and improved budget position, sustained reserves, and overall increasing flexibility with substantial federal funds and a bolstered retiree protection fund (RPF) 
• The S&P rating upgrade follows last week’s equivalent upgrade from Moody’s to Ba2 with a positive outlook, highlighting Detroit’s strong trajectory

S&P Global Ratings has raised Detroit’s General Obligation (GO) debt to a BB rating, noting the City’s improving economic outlook and strong fiscal management. At the same time, S&P upgraded its rating on Detroit’s Public Lighting Authority and Income Tax backed debt issued through the Michigan Finance Authority (considered Priority-Lien debt because of their pledge of specific tax revenues) to BBB- from BB+, marking a return to investment grade on certain bonds secured by pledged revenues. 

Additionally, S&P assigned a positive outlook to both GO and Priority-Lien debt: “Detroit remains, in our view, on a trajectory to meet increasing pension costs in the near and long term within a balanced budget framework, and if it does so, we could raise the rating. We feel the city has fiscal discipline and flexibility that can keep it on track should it experience economic slowdowns or higher-than-forecasted pension increases.”  

S&P’s credit action follows an equivalent rating upgrade to Ba2 from Ba3 issued by Moody’s last Wednesday, also with a positive outlook. The back-to-back announcements highlight not only strong fiscal management and budgetary performance, but also the rating agencies’ positive assessment of the administration’s strategy for Detroit. Both S&P and Moody’s indicated that the reasoning behind rating upgrades included the City’s investments in workforce training, economic development, blight removal, and beautification.  

The S&P credit opinion emphasizes improving fundamentals in Detroit’s economy. The report notes, “Successes to date are reflected in increasing property values, improved public safety metrics, and reduced poverty rates; and substantial new job creation within the city likely reflects the private sector’s recognition of an increasingly skilled labor force.” 

The City’s strategic use of American Rescue Plan Act (ARPA) stimulus will bolster future growth, in S&P’s opinion. Their report states, “Detroit continues to prioritize investing in its residents and ARPA funds will accelerate this. The focus is on continued blight and abandoned building removal, streetscaping, and beautification projects, all of which have proven to increase home values and public safety, along with people projects such as paying for job training and degree attainment, improving internet access, and facilitating record expungements, which help better position residents for jobs.” 

S&P further indicated the potential upside scenario for Detroit: “We could raise the rating over the next one-to-two years if the city sustains budgetary balance, including increasing pension contributions and not relying on reserves, and if we feel it is likely to continue to do so without deferring expenses or depleting the RPF at a rate that puts future budgets at increased risk.” 

Detroit last saw an upgrade on its GO debt from S&P in February 2019, when the rating agency raised the City to a BB- from a B+. The last time Detroit held a rating as high as BB from S&P was a decade ago in March 2012. Improved bond ratings are indicative of a city’s finances and financial profile, and higher ratings mean lower costs for governments when they borrow funds to pay for various capital improvements. 

Detroit Chief Financial Officer Jay Rising noted that “this S&P upgrade is a double dose of good news; affirming the efforts taken to improve the City’s general obligation credit and returning an important segment of our portfolio to investment grade.  The upgrade is the product of the strategy of rebuilding the City’s credit through creating economic opportunities, improving security and restoring the beauty of the City for Detroiters.” 

The Priority-Lien rating relates to the 2014 Income Tax Bonds which are secured by municipal income taxes, and the 2014 Public Lighting Authority (PLA) bonds which are secured by utility users taxes (UUT).