Detroit’s $3B Budget: How Mayor Duggan’s Tax Cuts Will Impact Homeowners

In a defining moment for his administration, Detroit Mayor Mike Duggan has unveiled his final budget proposal, a $3 billion fiscal roadmap that aims to strengthen the city’s financial future while delivering key quality-of-life improvements. This historic budget plan focuses on reducing Detroit’s notoriously high property taxes, expanding transit services, addressing homelessness, and advocating for crime prevention funding—all without compromising city operations.

With Duggan choosing not to seek a fourth term and instead focusing on a run for Michigan governor in 2026, this budget sets the stage for his successor to build upon Detroit’s financial recovery and urban revitalization. But what does this proposed budget mean for Detroiters? Let’s break it all down.

Mayor Mike Duggan, Facebook

A Historic Property Tax Cut for Detroit Homeowners

One of the most significant highlights of Duggan’s budget is a 3-mill property tax reduction, the largest single-year cut in over a decade. For a home valued at $100,000, this equates to an annual savings of $150—a welcome relief in a city where property taxes have long been among the highest in the nation.

Why This Tax Cut Matters

Detroit property owners currently pay 68 mills if they qualify for a principal residence exemption and 86 mills if they do not. Comparatively, many neighboring suburbs have tax rates in the 40s and 50s, making Detroit’s rates a major deterrent for potential homeowners and investors.

“This doesn’t affect our operations. This doesn’t cut into any of our services,” Duggan reassured. “This is money that is being saved because we have paid off our past debt.”

Detroit has already reduced property taxes by 1 mill in both 2023 and 2024, making this year’s 3-mill cut a significant step forward. While this move brings some relief, Duggan acknowledges that more comprehensive tax reform is needed to make Detroit competitive.

The Missed Opportunity: Duggan’s Failed Land Value Tax Plan

In 2023, Duggan proposed a Land Value Tax Plan, which aimed to slash operating millage by 70% (or 14 mills) for homeowners while increasing taxes on vacant landowners and underutilized properties. The idea was to encourage development while easing the tax burden on those actually living and working in the city.

However, the Michigan Legislature never approved the plan, and Duggan’s final budget instead settles for a more modest 3-mill reduction—a step in the right direction, but far from the transformational change he originally envisioned.

Detroit’s Financial Health: “Revenues Running Very Strong”

Duggan’s budget proposal paints a fiscally optimistic picture. The city’s revenues are outpacing projections by $70 million, fueled by:

$22 million in higher-than-expected income tax revenue
$30 million in increased gaming tax revenue
$7 million in property tax growth

“This city is in good shape,” Duggan declared. “The reason we’re financially strong is our income tax revenue performance.”

The budget includes $500 million in reserves, which Duggan describes as a “cushion” to ensure financial stability:

$150 million in the Rainy Day Fund to protect against economic downturns.
$348 million in the Retiree Protection Fund to safeguard pension obligations for former city workers.

Detroit’s strong revenue growth has enabled the city to maintain 11 consecutive years of budget surpluses, a far cry from the bankruptcy crisis that defined Duggan’s early tenure.

Expanding and Improving Public Transit

One of the biggest quality-of-life improvements in the budget is a $20 million increase in transit funding, aimed at boosting bus service and hiring more drivers and mechanics.

Key Transit Investments

45 new buses arriving in late summer.
63 additional drivers and 24 new mechanics to improve reliability.
Daily bus service increasing from 178 to 220 buses.

For years, Detroiters have struggled with unreliable bus service, with as many as a third of the city’s buses often out of commission due to maintenance issues. Duggan’s transit overhaul seeks to fix these inefficiencies and bring service levels back to pre-pandemic highs.

“This is for the kind of service we deserve,” Duggan emphasized, pointing out that Detroit’s highest level of bus service was 214 buses before the pandemic. By January, he expects 220 buses to be running daily, a milestone for the city’s transit recovery.

Addressing Detroit’s Homelessness Crisis

The budget includes a 40% increase in homelessness funding, bringing the total to $8.4 million. This comes in response to a devastating tragedy in which two young children froze to death while sheltering in a van with their mother in a casino parking garage.

Key Homelessness Initiatives

Doubling immediate shelter beds from 110 to 220.
Expanding outreach workers to connect more people with services.
Exploring the use of recreational centers as drop-in shelters (a suggestion from City Council).

Despite these efforts, some community leaders remain critical. Rev. Roslyn Bouier of the Beloved Community United Church of Christ questioned why the budget includes $25 million for blight removal while only $1 million is added to the city’s Affordable Housing Trust Fund.

“Does anyone else find a problem with that other than me?” she asked.

City Council President Mary Sheffield, a mayoral candidate, emphasized the need for long-term housing solutions, rather than just temporary shelter expansions.

Public Safety & Community Violence Intervention (CVI) Programs

With federal funding for Detroit’s CVI programs set to expire, Duggan’s budget allocates $4.4 million to keep them running. The CVI initiative has been credited with reducing crime by intervening in at-risk communities before violence escalates.

Push for a Public Safety Trust Fund

Duggan is also urging the Michigan Legislature to approve a $75 million Public Safety Trust Fund, which would allocate $18 million annually to Detroit for crime prevention efforts. The funding is available, but political gridlock in Lansing has stalled the initiative.

“The $75 million is sitting in an account for public safety in the cities of this state,” Duggan explained. “It’s just waiting for the Legislature to act.”

City officials are pushing for the bill’s passage before Duggan leaves office, but its future remains uncertain.

Other Budget Highlights

$14 million for freeway, alley, and commercial corridor cleanup.
$2.5 million for Motor City Match, a program that provides funding and resources to small businesses.
$10 million for supplemental payments to city retirees (the "13th check").
$4 million for the Detroit Neighborhood Solar Initiative, promoting renewable energy in local communities.

What’s Next? City Council’s Role & Detroit’s Future

The Detroit City Council will hold budget hearings next month before voting on the final budget by April, ahead of the July 1 start of the new fiscal year.

With Duggan exiting the mayor’s office, the city’s next leader will inherit a budget focused on long-term stability, targeted tax relief, and public investment. As Detroit continues its comeback, the question remains: Will Duggan’s successor build on this foundation, or take the city in a new direction?

One thing is clear—this final budget isn’t just numbers on a page. It’s a reflection of Detroit’s past struggles, its present momentum, and its future potential.