On Sept. 22, the City of Detroit’s budget office announced its 11th consecutive annual surplus since emerging from bankruptcy, a significant milestone demonstrating the City’s continued fiscal turnaround. The announcement, made at a Revenue Estimating Conference meeting, was accompanied by more good news: the University of Michigan economic forecasters noted the City’s unemployment rate has fallen by over half a percentage point, with wage growth outpacing that of the state.
Despite this positive momentum, the Duggan administration is taking prudent steps to safeguard the City’s financial health against future uncertainty. Detroit Mayor Mike Duggan has proposed an amendment to the current budget to create a new $42 million Corporate Income Tax Reserve Fund. This measure is a direct response to concerns over declining corporate tax revenues, stemming from a potential manufacturing slowdown, federal tax law changes, and tariff uncertainty.
According to the City’s Chief Financial Officer, if the tariff issues are not resolved at the national level, Detroit could face a revenue loss of $26 million by the end of the year. The proposed fund, created from a $60 million surplus generated by cost savings across City departments, would be added to existing reserves, growing the City’s total cash reserves to $544 million.
The Detroit Regional Chamber strongly supports this forward-thinking fiscal management. Predictable and stable governance is essential for a thriving business environment, and this proposal provides an additional layer of security that the business community values. By taking proactive steps to hedge against potential economic headwinds, the city fosters the confidence needed for continued private investment and growth.
This action is particularly commendable as the city prepares for a new mayoral administration in 2026, ensuring the next leaders inherit a financially sound city and can avoid disruptive budget shortfalls. The Chamber has long advocated for fiscal responsibility and cooperation to maintain stable government operations, and this proposal is a textbook example of that principle in action.