Mayor presents proposed FY2026 budget calling for 3‑mill property tax cut, $20 million boost for DDOT and expanded homeless services

The mayor presented the proposed fiscal year 2026 budget to Detroit City Council on the legislature’s dais, saying the plan is balanced and would include a 3‑mill reduction in the city’s debt mills and new recurring investments in transit and homeless services.

The presentation — delivered after the council established a quorum — framed the proposal as a continuation of recent revenue gains. “We are actually running $70,000,000 ahead of projection in the existing fiscal year,” the mayor said, and he attributed the city’s improved outlook to stronger income, gaming and property tax collections.

Why it matters: The budget proposal would cut the city’s debt millage from 7 mills to 4 mills, a change the mayor said would produce roughly a $150 annual saving for the owner of a $100,000 house. At the same time, the plan would preserve and add to reserves, increase recurring spending for Detroit Department of Transportation (DDOT) service and expand shelter and outreach funding for people experiencing homelessness.

Revenue, reserves and retiree protections The mayor reported the city is roughly $70 million ahead of projections in the current fiscal year, citing increases of about $22 million in income tax collections, $30 million in gaming receipts and $7 million in property tax collections. He said expenditures are about $2 million under projections and that the city will finish the year with a surplus.

On reserves, the proposal would raise the city’s rainy‑day fund to $150 million (the mayor characterized that figure as double the state‑law minimum reserve he referenced), keep $350 million in a retiree protection fund and hold about $50 million in liability reserves. “In addition to a balanced budget, we have $550,000,000 in reserves,” the mayor said.

Property tax change The mayor said the recommended budget would reduce the debt millage by 3 mills, from 7 to 4, and called the cut “a big property tax cut” for Detroit homeowners. He said the change “doesn’t affect our operations. This doesn’t cut into any of our services,” and described the cut as possible because debt service obligations have declined.

Transit: $20 million increase for DDOT The single largest year‑over‑year spending increase in the mayor’s proposal is a $20 million boost to DDOT, raising that operating budget from about $190 million to $210 million. The mayor said the increase is recurring and intended to support new buses and service expansion: 45 new buses are on order and will arrive beginning in late summer and through 2025, and the city anticipates going from roughly 78 buses in daily service today to about 220 buses per day when deliveries and hiring are complete.

He said the proposal would add about 63 drivers and 24 mechanics and bring daily bus service above pre‑pandemic levels. Council members asked whether the $20 million is recurring; the mayor answered it is part of the base and will need additional increases in future years to sustain further expansion.

Homeless services and housing supports The proposed budget would increase the city’s general fund contribution to homeless services from $6 million to $8.4 million and expand immediate shelter beds from 110 to 120. The mayor said last year’s additional general fund contribution — made alongside federal homeless funding — allowed the city to create immediate shelter and expand outreach, and he described the new increase as a response to recent tragic events and continuing need.

Council members asked about longer‑term supportive housing and permanent solutions. The mayor and staff pointed to an ongoing pipeline of permanent supportive and affordable housing developments and to a pilot ordinance intended to speed rehabilitation of existing buildings; staff said roughly 40 projects had applied under that pilot. The mayor said the city has built roughly $1.2 billion in affordable housing in the past six years but said more investment is needed.

Community violence intervention and state trust fund The mayor proposed $4.4 million in general fund support to keep the city’s Community Violence Intervention (CVI) program operating at base levels. He described a statewide “public safety trust fund” that passed the House but stalled in the Senate and said the state appropriation had been left in an account that is not yet flowing to cities. He said that account was created for $75 million statewide — a sum that, if distributed as originally envisioned, could have meant about $18 million for Detroit — and urged council to advocate for the fund’s passage so local CVI programs could expand.

Retiree supplemental payment and blight removal The mayor again proposed a $10 million supplemental payment to retirees ($5 million for police and fire; $5 million for general‑fund employees) and proposed $21 million for blight removal this year. He said the 2020 voter‑approved Proposal N bond (a $250 million bond) had funded a large demolition and rehabilitation effort and that the land bank’s demolition work has reduced the backlog dramatically: he said roughly 7,472 demolitions were completed so far and projected demolition counts would reach about 8,200 by year’s end, with more than 10,000 sales of renovated properties.

Taxes, development incentives and the pilot ordinance The mayor defended development discounts used to attract large projects and said the city’s income tax performance — which he said has averaged about 7% growth annually since exit from bankruptcy — has been the key revenue driver. He referenced the Downtown Development Authority model as an early strategy and cited recent private investments and conversions downtown.

Council questions and staff responses Council members used the presentation for high‑level questions, since the budget book was delivered the same morning. Topics covered included: permanent supportive housing and use of vacant commercial buildings; the staff response that the pilot ordinance gives extra credit for renovation projects and that multiple projects are in the pipeline; staffing and vacancy transitions in Construction Code (BC) where formerly ARPA‑funded inspector positions were moved to the construction code fund to allow hiring; and a request that administration staff provide clearer annual spending figures for programs funded with ARPA (notably right‑to‑counsel funding, which staff said remains available at previously budgeted levels).

Public comment and themes During the public comment period, speakers urged larger investments in transit, more permanent affordable housing targeted to very low incomes, and greater transparency on uses of city and captured downtown tax revenues. Public commenters included advocacy and service providers who called for larger DDOT investments (some advocates asked the city to target $150 million or more for transit reimagination over time), and housing advocates who said most city‑subsidized “affordable” units (often tied to 60% area median income) do not reach the lowest‑income residents experiencing homelessness.

Other items mentioned in public comment included concerns about the Detroit Public Library administrative fee, requests for community land trust funding, and calls to use ARPA and other sources to bolster local social safety net programs.

Next steps Council members and the mayor confirmed the council would begin budget deliberations in the coming weeks; the council president said the formal hearings would start on Wednesday in March and continue for several weeks so members can review line items and hold department hearings.

Context and limits The presentation and the council’s initial questions were high level; council members noted the budget book was received the morning of the presentation and requested additional detail from departments during formal hearings. The mayor framed several proposals as contingent on continued revenue performance and on state and federal funding developments (for example, federal formula bus grants and the stalled Michigan public safety trust fund).