Northwest Wayne News

Detroit city officials in February held a biannual Revenue Estimating Conference, where they revealed their projections for revenue totals and the overall economic state for fiscal years 2022 to 2026. Officials reported that “Detroit’s economy continues to recover from the COVID-19 recession despite the resurgence in new caseloads,” according to a press release from the city.

The release noted that "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."

"Our economy is continuing to recover from job losses related to the pandemic, as we’ve seen 80% of resident employment return in 2021 with steady growth projected, and we’re beginning to see more fruit from economic development in the City of Detroit," Jay Rising, Detriot's chief financial officer, said in the release.

Rising added, "Blue-collar jobs are leading the recovery and, in fact, exceeding pre-pandemic levels as we see growth in all jobs, particularly related to development efforts by Amazon, GM’s Factory Zero, and Stellantis' Mack Assembly complex. Still, as we anticipate modest revenue growth in future years, we will maintain fiscal responsibility in our budget to ensure we achieve a balanced four-year financial plan."

The forecast was produced by the City of Detroit University Economic Analysis Partnership, Wayne State University, Michigan State University, and the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan, according to the release. The forecast predicted a faster financial improvement for Detroit than for the state.

Resident employment is projected to rise to pre-pandemic levels by the end of 2022, the release said. Most of the growth is attributed to major city-led projects, such as the Stellantis and General Motors automotive plant expansions and Amazon’s new distribution center.

Recurring city revenues are predicted to surpass pre-pandemic levels before June 30, as a result of stronger income tax collections, coupled with the boom of internet gaming and sports betting last year, according to the release. The popularity of remote and hybrid work models is expected to continue and become more common in the area.

FY 2022 General Fund recurring revenues are estimated to be $1.087 billion, a $23.8 million (2.2%) increase from the forecast presented in September 2021, the release said. This was fueled by stronger income tax collections and state revenue sharing from sales taxes. The city also projected approximately $50 million in non-recurring revenues this year. Next fiscal year’s General Fund recurring revenues, set to begin on July 1, are predicted to be $1.147 billion, an increase of $60 million (5.5%) over this fiscal year's estimates.  

For FY 2024 through FY 2026, officials hope the General Fund will see continued but modest growth at a rate of approximately 2% per year, on average, according to the release.

All other revenues are expected to see stable growth. The remaining estimates for budgeting will be revealed upon receiving approval. 

The voting conference principals are Rising; Eric Bussis, chief economist and director of the Office of Revenue and Tax Analysis at the Michigan Department of Treasury; and George Fulton, director emeritus and research professor emeritus at the RSQE at the University of Michigan, the release said.