Detroit’s Financial Condition Improves, Earning a “C” Grade

Detroit’s financial condition improved in fiscal year 2023, but the city still faced a $381.8 million shortfall. This equates to a Taxpayer Burden™ of $1,600, earning Detroit a “C” grade and classifying it as a “Sinkhole City” in Truth in Accounting’s latest report.

The city's financial position improved by $381.8 million, with revenues increasing and expenses decreasing. A major factor in this improvement was lower pension costs, following adjustments made during Detroit’s bankruptcy restructuring. Additionally, expenses for Development and Management and Public Protection declined by $156.7 million and $158.9 million, respectively.
Taxpayer contributions for governmental activities totaled $1.08 billion, representing 50.4% of total revenues—a $174.5 million increase from the prior year. Municipal income tax collections alone rose by $135.6 million, helping to narrow the city’s financial gap. However, Detroit still faces significant pension liabilities that will require ongoing fiscal management.
Key findings from the report include:

• Detroit had $4.4 billion available to pay $4.8 billion in bills.
• The city’s financial shortfall amounted to $381.8 million, leaving each taxpayer with a $1,600 burden.
• Revenue growth and expense reductions helped improve financial health, but pension liabilities remain a challenge.

Detroit has made strides in controlling costs and increasing revenue, but addressing long-term pension obligations will be key to ensuring future fiscal stability.

For those interested in a deeper dive into Detroit’s finances—and how it compares to other major U.S. cities—you can read the full Financial State of the Cities 2025 report here.