Detroit budget committee weighs restoring oversight agencies’ proportional funding amid revenue shortfall

The Expanded Budget, Finance and Audit standing committee returned to an executive-session follow-up to review oversight-agency budget requests and a spreadsheet prepared by budget staff, with the central question whether to resume the council's previously approved three-year ramp toward "proportional funding." The administration told members it could not fully restore the increases because general-fund revenues are sharply lower than a year ago.

Why it matters: the proportional-funding ordinance and companion resolution approved last year set targets to raise the city's oversight offices to a specified share of general-fund resources over a multi-year period. Supporters say the ramp protects independent audit, ethics and ombuds services; the administration counters that honoring the ramp in full this year would require recurring cuts across core services while the city absorbs a significant revenue shortfall.

Budget staff presented the baseline and proposed changes. The auditor general's adopted FY26 baseline was shown at about $5.85 million, the ombudsperson about $1.95 million, the office of inspector general about $2.3 million and the board of ethics about $900,000; the administration's FY27 proposed budget reduces those baselines (the auditor general reduction was listed at roughly $217,000 in the spreadsheet). Corley, who prepared the spreadsheet, said the agencies proposed restoring the ramp-up amounts in addition to amounts the administration trimmed; he summarized the agencies' combined ask at roughly $1.77 million in the example shown to the committee.

The OCFO representative urged caution. "While I know there's always a goal for proportional funding, the fiscal realities of the city override any other resolution that may be adopted," Johnson said, arguing the city must budget against the current revenue estimate produced by the revenue-estimating conference and avoid adding recurring baseline dollars when revenue has fallen. He described efforts to align reductions across departments and said the city is on track for a multiyear undercollection in income taxes. Later in the discussion Johnson quantified the projected income-tax undercollection at about $56.2 million for the current fiscal year and said state revenue-sharing cuts of roughly $4 million also contributed to the strain.

Agency leaders said the reductions would undercut core functions. "The proportional funding ordinance went through two years of rigorous debate," Auditor General Goodspeed told the committee, and her office's reduced request would still include restoring training and one FTE that the administration's cut would have eliminated. She warned that a $217,000 reduction would wipe out training dollars required for continuing professional education and limit the office's ability to grant merit increases. Later, Goodspeed said she expects her office to spend toward its baseline but highlighted recent retroactive pay timing and other personnel uncertainties.

The Board of Ethics and ombuds office also pressed their cases. "The deduction of $82,000 is untenable for my office," Board of Ethics representative Phillips said, noting the cut threatens a learning-management system and two staff hires. Madeline Button, the ombudsperson, described inheriting an office with limited institutional memory and cited thousands of open cases; she said rolling back the ramp would frustrate the recovery plan the agencies presented with the ordinance and resolution.

Legal and technical framing: Attorney Phil Keller (LPD) explained how the proportional percentage is calculated (an agency's target equitable funding divided by the prior-year adopted general-fund budget) and reminded the committee the council adopted a three-year ramp with specified percentages to reach full targets. Keller and Corley discussed an ordinance provision that allows an "alternative minimum" calculation when the general-fund situation warrants it.

Council direction and next steps: members pressed both sides for data on historic spend rates, the effect of recent union retroactive pay and whether monies could be phased or directed as one-time investments rather than recurring baseline increases. Several members said they wanted to honor the ordinance's intent where possible but avoid destabilizing the core services that rely on the same general fund. Committee staff said a new, updated spreadsheet and closing-resolution language would be circulated for the committee's next session; members scheduled a reconvening with an updated book and closing-resolution drafting to finalize line items.

Attributions: direct quotes and figures in this story come from the committee's executive-session discussion and the spreadsheet presented by budget staff, as recorded in the committee transcript. The first reference to each speaker includes their full name and role as stated on the record.

What to watch: the committee will reconvene with an updated spreadsheet and draft closing-resolution language; the key decision is whether to fund oversight ramp amounts as recurring baseline increases, to shift them to one-time additions, or to defer further progress until revenues recover.