The city of Detroit is projected to have a $60 million surplus at the end of the fiscal year, Mayor Mike Duggan said Monday.
Speaking at the Detroit Police Department’s headquarters, Duggan said this is the 11th consecutive year that the city will see a budget surplus.
He proposed that Detroit use roughly two-thirds of the money to establish a $42 million reserve fund for the next fiscal year, saying he's concerned about the potential for declining revenue from corporate income taxes, largely due to uncertainties at the federal level.
"This is the first time since I've been here we've seen corporate profits go down,” Duggan said. “It does put you in a situation where something like tariff uncertainty can have a significant impact in a short period of time. ... We are going to make sure we cushion against this.”
Duggan, who is not seeking another term as mayor, but instead running for Michigan governor as an independent, said he wants his successor to inherit a budget surplus, the same way he did when entering office.
Detroit is one of the two dozen Michigan cities that levies its own corporate income tax. Provisions in President Donald Trump's budget law — the One Big Beautiful Bill Act — change how the depreciation of assets is calculated, which can let businesses report lower profits. That means reduced revenue for governments that tax those earnings. Detroit officials said that could cost the city $16 million — but it's not clear if the changes to federal law will apply at the municipal level.
Duggan also said he fears a tariff war could cost the city in lost manufacturing tax revenue.
Detroit already has more than $500 million in total cash reserves, including $150 million in a rainy day fund, $281 million in a retiree protection fund and $71 million in a risk management liability fund, the city said. The proposed reserve fund to cushion against a decrease in corporate tax revenue would need to be approved by the city council.
Detroit's Chief Financial Officer Tanya Stoudemire called the $60.2 million surplus figure a “conservative estimate,” which will likely increase.
Duggan credited the surplus to savings across departments in the city, applauding department heads' “diligence” in cost-cutting this year.
