Detroit treasury projects $2.66 billion in 2027 revenue, flags corporate tax hit from federal law

Treasury and budget staff told Detroit’s Budget, Finance and Audit Standing Committee on Oct. 8 that the city’s preliminary revenue estimate for fiscal 2027 is roughly $2.66 billion and outlined risks that could shrink those projections.

“We’re estimating roughly $2,660,000,000 overall for funds in 2027,” said Sean Tobin, deputy director of strategic finance and analytics in the treasury department. He said the total includes about $1.4 billion in general‑fund revenues and roughly $739 million from water and sewer operations, with about $500.5 million in other recurring sources such as library, street funds and UTGO debt service.

The presentation, drawn from the Sept. 22 Revenue Estimating Conference, also highlighted two downside drivers: changes from a recently enacted federal law the presenters called the “1 Big Beautiful Bill Act” and tariffs introduced in April 2025. Tobin said the federal law alters how corporations calculate taxable income and that the city, which uses the Internal Revenue Code definition for corporate taxable income, expects local corporate income tax collections to fall as a result. “We are estimating roughly $16,000,000 for fiscal years 26 and 27,” Tobin said of the expected reduction, tapering to about $8,000,000 by 2030.

Erica Mooney, the treasury economist, reviewed major revenue categories and risks. She said internet gaming produced a notable upside this year but cautioned that wagering growth may not continue at the same pace; she also described state revenue‑sharing and utility‑users tax assumptions. On reserves, Mooney noted the city’s budget reserve currently stands at about $150 million.

Council and staff discussed policy implications and mitigation steps. A member asked whether the city could face a deeper downturn; Valerie Agoli, acting deputy CFO and treasurer, said the administration had already recommended and the council approved creating a corporate income tax reserve. “One of the things that the city council approved this week to buffer against that is using $42,000,000 of that fiscal year 25 surplus anticipated to set aside in a reserve,” Agoli said.

Presenters described their process: the revenue estimates cover the current fiscal year and four out years, and the Sept. conference is an early round ahead of a February update that will form the basis for the FY27 budget. Tobin and Mooney pointed to uncertainty in employment, federal trade and fiscal policy, and industry‑specific factors — noting local employers such as Stellantis and Rocket — as variables they are monitoring.

Committee members pressed staff on demographic and labor‑market context, remote‑work refund estimates, and the effect of the federal change on municipal revenue. Mooney estimated a normalized level of income‑tax refunds tied to remote work around $60 million annually and said the forecast assumes modest recurring growth in the general fund.

The committee voted with no objections to receive and file the revenue estimating conference report; staff said the materials and a recording are available on detroitmi.gov under OCFO financial reports.

What’s next: staff will refine the revenue forecast in February 2026 and those figures will inform the FY27 budget presented to council.