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On September 11, 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 2024 and for fiscal years 2025 through 2028. 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.
Revenue Outlook Continues to Improve
The Detroit Economic Outlook for 2022-2028, which was previously released in August, predicts the City’s economy will continue to see steady growth, with increasing jobs and wages. 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 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 revised revenue estimates moderately upward for the current fiscal year based on stronger tax 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 lead revenue growth in future years, in line with the City’s economic forecast.
These revenue estimates are based on the most recent economic projections and forecasting models. As with any economic and revenue forecast, there are potential risks to the estimates approved today, including unexpected changes in local employment and current income tax collections, as well as competing State budget pressures affecting forecasted revenue sharing. However, the City’s efforts to continue attracting major employers and providing Detroiters with opportunities for good-paying jobs provide potential revenue upside to the forecast.
“The steady growth projected for Detroit’s economy is reflected in the stability and growth in our revenue forecast. We will continue as in prior years to provide fiscal stability through balanced budgets that protect Detroit’s ability to fund its obligations while further improving the quality of life for Detroiters,” said Jay Rising, Chief Financial Officer, City of Detroit.
Revenue Estimating Conference Results
The Revenue Conference reported FY2024 General Fund recurring revenues projected at $1.284 billion for the current fiscal year ending June 30, 2024, up nearly $31 million (2.5%) from the previous conference estimate in February 2023. The increase is driven by our growing income and property tax base and revenue sharing increases provided by the State of Michigan. The FY2024 revenue estimates also include an additional $25.8 million of non-recurring revenues, primarily from short-term investment earnings.
General Fund recurring revenues for FY2025, which begins July 1, 2024, are now forecasted at $1.315 billion, an increase of $31 million (2.4%) over the revised FY2024 estimates above. The projected increase is led by income taxes as the local economy continues to see steady growth in jobs and wages. The out-year forecasts for FY2026 through FY2028 show continued overall revenue growth of about 2% per year.
The City will use the estimates approved today to begin developing the City’s FY2025 Budget and FY2025 through FY2028 Four-Year Financial Plan. The conference will meet again to approve revised revenue estimates in February 2024. 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.
Please see links to the Revenue Estimating Conference presentation slides below.
To review past Revenue Estimating Conference Reports visit Financial Reports under Revenue Estimating Conference Reports section.