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City reports midyear operating surplus, projects narrow annual shortfall as budget season approaches
Summary
Detroit's acting budget director said the city posted a $35.6 million revenue surplus and a $43.9 million operating surplus through Dec. 31, while projecting an end‑of‑year revenue undercollection of roughly $13.8 million; officials urged caution ahead of the mayor's FY27 proposal.
Acting Deputy Chief Financial Officer and Budget Director Donnie Johnson and Acting Treasurer Valerie Agoli briefed the committee on the six‑month financial report for the period ending Dec. 31.
"For the eleventh straight year, Detroit home values are up," Johnson said, noting a citywide average increase of about 10% that added roughly $500 million in homeowner wealth. Agoli told members the city was running ahead on revenues as of Dec. 31 with a $35.6 million surplus, driven primarily by wagering taxes and stronger property tax collections; the report showed an operating surplus of $43.9 million and an annual projection that still anticipates a $13.8 million revenue deficit once the year is annualized.
Agoli walked the committee through a series of quarterly and monthly slides covering income tax withholding (up $8.8 million year‑to‑date), corporate collections, cash and investment positions (noting ~$38.2 million in investment gains through the period), accounts payable aging, and debt service schedules. She said changes in timing — such as mortgage servicers paying winter taxes in December rather than January — explained some month‑to‑month collection variances.
Members asked how midyear figures should inform upcoming budget deliberations. Johnson recommended a "guardedly optimistic" posture: while collections showed positive trends, he warned that economic headwinds could change forecasts and urged conservative assumptions for the FY27 budget.
Committee members also asked about the link between property tax collections and the solid waste fee, and Agoli explained that the solid waste fee is collected with property taxes and therefore tends to track property tax payment rates.
The committee received the financial report and will review revised revenue projections and the mayor's proposed FY27 budget, which officials said will be presented to council on March 9.
