Detroit budget office presents prelim. FY2025 numbers; projects ~$60.2M unassigned fund balance amid corporate tax uncertainty

Donnie Johnson, acting deputy chief financial officer and budget director, told the Budget, Finance and Audit Standing Committee that the city’s unaudited financial results for the 12 months ending June 30, 2025, currently point to an estimated $60,200,000 unassigned fund balance but cautioned the figure is preliminary and subject to year‑end accruals and adjustments.

"These results are still preliminary, they're unaudited and they do exclude material year end accruals," Johnson said while presenting the annualized projection. He said the city was ahead on revenues for the month of June but, on a year‑to‑date basis, was $7,000,000 to $8,800,000 under budgeted revenue targets, driven primarily by lower corporate income tax receipts.

Deputy Treasurer Valerie Agoli said corporate income taxes were roughly $13,000,000 lower than the prior year and that many large corporate filers use extensions until Oct. 15, which could change final fiscal‑year allocations. "For corporate income tax, the amount won't be final until October 15," Agoli said, explaining that some liabilities may be settled after extensions are processed.

Johnson and his team said expenditure underspending offset much of the revenue shortfall: the city underspent by roughly $133,200,000 during the year, leaving a budgetary surplus on a cash‑basis that they projected would translate into a net positive after estimated accruals. The presentation included an explanation that much of the underspend is a timing issue — goods or services delivered near year‑end often are invoiced after June 30 and must be accrued into FY2025 if invoices arrive later.

Officials also walked the committee through staffing changes and cash‑flow details: headcount rose by about 105 full‑time equivalents between May and June, with the largest increases in police staffing and seasonal recreation positions, while operating cash was lower than the prior year in part because a state revenue‑sharing payment arrived in July rather than June.

OCFO staff told members they expect some adjustments during the close process — income‑tax true‑ups, benefits reconciliations and other accruals — and asked the committee to treat the numbers as provisional until the formal audited statements are complete.

The committee voted without objection to receive and file the FY2025 financial report and asked OCFO to return with more granularity on several expenditure categories in follow‑up sessions.