Press Release

City of Detroit Reports Revised Revenue Estimates for Fiscal Years 2024-2028

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February 13, 2024

Press Release
  • Detroit’s economy continues to grow at a steady pace, marked by job and wage gains for Detroiters
  • Revenue Outlook is stable with steady growth, led by income tax
  • Additional development projects throughout Detroit could bolster more robust levels of revenue growth

On February 12, the City of Detroit held its regular biannual Revenue Estimating Conference to receive an update on the Detroit economic outlook and approve new 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. 

Detroit’s Economy Continues to Grow at a Steady Pace

Detroit’s economy continues to show steady growth marked by job and wage gains for Detroiters and improving employment level, according to the Detroit Economic Outlook for 2023-2028 released by the University of Michigan earlier this month.

The economic outlook report shows “payroll jobs are expected to increase by 3,000 this year after 600 net job losses in 2023. Job gains accelerate to 3,800 in 2025 and then average 1,700 a year for the duration of the forecast.” Employment grows for Detroiters by an average of 1,600 residents yearly through 2028, as resident employment grows faster than payroll employment. Payroll employment means jobs located inside the City, whether held by residents or nonresidents. Resident employment means jobs held by Detroiters, whether located inside or outside the City.

The City’s jobless rate is projected to fall from 8.2% to 7.1% by the end of the forecast period. And “those declines come along with growth in the city’s labor force, which reaches its highest level since 2013 by the end of our forecast period,” according to the economic outlook report. Overall, the report shows City residents will see larger paychecks over the next four years, increasing by 3.7% per year while payroll jobs located in the city will increase by 3.4%.  Average resident wages are expected to climb to nearly $50,000 by 2028, 42% higher than in 2019 and 86% higher than in 2014.

Revenue Outlook is Stable with Steady Growth

The City’s revenue outlook is improving, with steady growth led by income taxes, which follow our continuing efforts driving economic opportunity and growth for Detroiters. The Revenue Conference has revised revenue estimates slightly upward for the current fiscal year, showing the City’s resilience, notwithstanding a short-term interruption in wagering taxes during the casino workers’ strike last November.

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 help mitigate such risks and provide potential upside to the forecast.

“Detroit continues to see a healthy economy from the City’s strategy of creating good-paying jobs in diverse economic sectors, despite higher interest rates. This economic resilience will benefit the City as growth stabilizes in the post-pandemic period ahead. 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 $1.290 billion for the current fiscal year ending June 30, 2024, up $5.5 million (0.4%) from the previous conference estimate in September 2023. The increase is primarily due to the higher income taxes, offset by temporarily lower on-site casino revenue due to the November casino workers’ strike.  

General Fund recurring revenues for FY2025, which begins July 1, 2024, are now forecasted at $1.329 billion, an increase of $39.5 million (3.1%) year-over-year compared to the revised FY2024 estimates. 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 recurring revenue growth of about 2% per year. 

The City will use the estimates approved today for the City’s FY2025 Budget and FY2025 through FY2028 Four-Year Financial Plan. 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. 

Find more information on the Revenue Estimating Conference at detroitmi.gov/budget.

February 2024 Revenue Conference - Revenue Estimate Slides

February 2024 Revenue Estimating Conference - Economic Outlook Slides

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