Mayor Mike Duggan on Monday presented his proposed $2.4 billion budget to the City Council that he says shows Detroit’s revenues on par with levels before the start of the coronavirus pandemic.
Duggan said the budget would be Detroit’s eighth consecutive balanced budget following its 2014 exit from bankruptcy.
The proposed overall budget includes the city’s $1.2 billion general fund budget and other funds for the fiscal year beginning July 1. It has to be approved by the City Council and would be $115 million more than its 2021-22 overall budget.
It includes a $67 million increase across city departments to restore the budget after cost cuts made due to the coronavirus pandemic.
Of that amount, $26.5 million will go toward restoring support for Detroit’s Department of Transportation and the People Mover elevated rail system. Another $29 million would restore funding to police and fire positions. Duggan’s office says $16 million would be budgeted for city employee pay increases.
“What we are presenting today is a post-crisis, post-COVID budget,” Duggan told councilmembers. “It’s really a return to a normal budget.”
About two years ago, Duggan said the state-forced shutdown of Detroit’s three casinos, auto plants and other businesses to slow the spread of the COVID-19 virus would cost the city $348 million over a year and a half. Detroit cut $400 million from its budget to offset pandemic-related revenue losses to keep the budget balanced and prevent the city’s return to state financial oversight, Duggan said.
About 2,000 city employees were put on furlough or part-time hours.
Federals funds helped Detroit and other cities navigate financial losses during the pandemic, but that money has all but run out.
Detroit’s finances were controlled by a state-appointed manager in 2013 when the city filed the largest municipal bankruptcy in U.S. history. Detroit exited bankruptcy in December 2014 after a federal judge approved a plan to restructure the city’s $12 billion debt load.
But the city remained under a financial review commission that required the state to sign off on every contract, every budget and every union deal, Duggan said.
After three consecutive years of balanced budgets, Detroit was released from active state oversight in 2018, although the review commission would be required to keep its eyes on Detroit for another decade to make sure Detroit had annual balanced budgets.
“We got out of active oversight in 2018, shocked everybody that we got out in the earliest possible date,” Duggan said. “And with this year’s budget proposal, this would be the fifth year of the 10 on the passive oversight.”
“I hope that you would share with me a passion to make sure that the city of Detroit never again loses its right to self-determination,” he told the City Council.