City of Troy reports 4.5% revenue increase and 10.3% spending reduction

In a recent City Council Special Budget Study Session held on April 14, 2025, in Troy, Michigan, city officials presented a comprehensive overview of the city's financial outlook, highlighting both revenue growth and expenditure trends. The meeting underscored the city's commitment to maintaining a stable financial environment amid rising demands for services and infrastructure.

Citywide revenues are projected to increase by 4.5%, driven primarily by a rise in taxable property values, which account for approximately 38% of total revenue. Grants, including state shared revenue, are also expected to rise by 3.8%, contributing 15% to the overall revenue. Charges for services, particularly in water, sewer, and recreation, make up 34% of the revenue, indicating a healthy and diverse financial base that is crucial for the city's operations.

On the expenditure side, total spending has decreased by 10.3%, largely due to the completion of major projects from the previous budget cycle. However, personnel costs have risen by 6.1%, reflecting cost-of-living adjustments and the addition of new positions. Notably, while capital outlay has decreased, this is attributed to the conclusion of one-time projects rather than a reduction in long-term capital investment.

The discussion also touched on tax rates, with the operating rate remaining stable at 6.5 mills. The capital rate has been declining, while refuse collection rates have remained steady. The meeting highlighted the complexity of tax collection, noting that the city collects taxes on behalf of various jurisdictions, including schools and county services, with only 27.8% of collected taxes retained by the city itself.

Over the past decade, the average residential tax bill has increased by 9.4%, with the most significant rise attributed to library funding, which saw a 77.4% increase following a voter-approved millage. In contrast, capital taxes have decreased by nearly 14%, reflecting changing priorities in funding.

The session concluded with a reminder of the importance of understanding the broader context of tax contributions, as many residents may not realize that a significant portion of their tax payments is allocated to other entities rather than the city itself. As Troy prepares for the upcoming fiscal year, the council's discussions will play a critical role in shaping the city's financial strategies and addressing community needs.