Continued fallout from the COVID-19 pandemic will linger in Detroit’s budget for the coming fiscal year, Mayor Mike Duggan told the Detroit City Council on Friday.
The city’s estimated 2022 fiscal year revenues are $995 million, less than what it brought in in 2019. The city has taken a particularly hard hit from the sharp drop in gaming taxes and income taxes paid by people who work in Detroit.
Duggan said his proposed budget is tight, but balanced, and mostly maintains the current “status quo.” He warned that “if we run a single deficit, active state oversight comes back for a minimum of three more years.” The city exited post-bankruptcy state oversight in 2018.
Around 1,000 city employees will remain on partial layoff, noted Duggan, who said the city doesn’t have the revenue to justify bringing them back yet. His proposed budget, which needs City Council approval, does contain some slight increases in a handful of areas, including police pay raises, expanding a police/mental health partnership, and the Detroit city clerk’s office.
Duggan said the city will add $50 million to its rainy day fund, and set aside additional money for its retiree protection fund.
Detroit needs to start making extra pension payments in 2024. Duggan said that pandemic or not, that money needs to be there for retirees when it comes due. “There was a need for us to put more money into this fund to protect the retirees,” he said. “So we are proposing…$85 million.”
Duggan said he’s hopeful that Detroit’s economy will recover relatively quickly from COVID-19, and revenues will come in higher than expected. “If that happens, I’m going to be really pleased to come back to you with budget amendments as the year goes on,” he told council members. “But we have to start by dealing with the revenues we have.”