Detroit's Fiscal Year 2023 Budget Returns to Pre-Pandemic Level

Strategic Insights -

The city of Detroit's fiscal situation has significantly improved, with Mayor Mike Duggan unveiling a proposed budget for Fiscal Year 2023 that restores the pre-pandemic status quo and makes key investments in beauty, transit, and retiree protection. The budget, totaling over $2 billion, includes a significant deposit to the Retiree Protection Fund, bringing the total balance to $460 million to prepare for annual pension contributions resuming in FY2024.

Key Takeaways:

  • The proposed budget for Fiscal Year 2023 totals over $2 billion, with over $1 billion for the General Fund.
  • The budget restores the pre-pandemic status quo and makes targeted new investments in key areas such as beauty, transit, and retiree protection.
  • A significant deposit of $90 million will be made to the Retiree Protection Fund, bringing the total balance to $460 million for annual pension contributions resuming in FY2024.
  • $30.7 million will be deposited into the Rainy-Day Fund, for a total balance of $138 million, plus $20 million in additional deposits planned after FY2023.
  • The budget includes $72.3 million in General Fund support for DDOT transit service and the People Mover, with a $5.8 million increase on top of $26.5 million restorations.
  • $17.5 million is allocated for Blight Remediation and Beautification Programs.
  • $10.7 million is allocated for Parks and Recreation Improvements.
  • $10.4 million per year is allocated for Public Safety, Parks, and General Vehicle Replacements.
  • $2.7 million is allocated for the Charles H. Wright Museum of African American History.
  • $1.5 million is allocated for the Detroit Historical Museum.
  • $2.3 million is allocated for Coleman A. Young International Airport Improvements, plus $1 million increase in operations to implement Airport Layout Plan.
  • Recurring City revenues are forecasted to reach pre-pandemic levels due to stronger income tax collections and the implementation of internet gaming and sports betting.
  • However, risks remain to the 4-Year Financial Plan from continued remote work, lingering pandemic effects, and legacy pension liabilities.

Statistics:

  • Total budget for Fiscal Year 2023: over $2 billion
  • Amount allocated for General Fund: over $1 billion
  • Deposit made to Retiree Protection Fund: $90 million
  • Total balance in Retiree Protection Fund: $460 million
  • Deposit made to Rainy-Day Fund: $30.7 million
  • Total balance in Rainy-Day Fund: $138 million
  • Amount allocated for DDOT transit service and the People Mover: $72.3 million
  • Increase in General Fund support for Paratransit Service and Vehicle Operations: $5.8 million
  • Amount allocated for Blight Remediation and Beautification Programs: $17.5 million
  • Amount allocated for Parks and Recreation Improvements: $10.7 million
  • Annual allocation for Public Safety, Parks, and General Vehicle Replacements: $10.4 million
  • Amount allocated for Charles H. Wright Museum of African American History: $2.7 million
  • Amount allocated for Detroit Historical Museum: $1.5 million
  • Amount allocated for Coleman A. Young International Airport Improvements: $2.3 million
  • Increase in operations to implement Airport Layout Plan: $1 million

Sources:

  • "Mayor: Fiscal Year 2023 budget returns to pre-pandemic level, makes investments in beautification, transit, and protecting retirees" - [no date]
  • Interview with Mayor Mike Duggan
  • Interview with Chief Financial Officer Jay Rising
  • FY 2023 Mayor Proposed Budget Presentation 3-7-22.pdf
  • FY23 Budget One-Pager.pdf
  • detroitmi.gov/budget
  • [emailprotected]