"The right to criticize government is also an obligation to know what you are talking about."

-Lent Upson, first director of Citizens Research Council

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February 5, 2026

Biweekly Newsletter

After evaluating two new potential local option taxes for Detroit in two recent reports (see: Evaluating a Local-Option Sales Tax Policy for Detroit and Evaluating Local-Option Admission Taxes in Michigan Cities), the Citizens Research Council concludes that the effort may not be worth the reward, especially for a local sales tax.

However, Detroit’s quandary could be a catalyst for reform. Should Detroit lead the effort for real change in municipal finance, state and local policymakers could successfully tackle diversifying revenue options for local governments statewide. Options include addressing state revenue sharing and modernizing the state sales and use tax acts, such as amending the existing statutes to include admission ticket sales. If reforms are tailored to meet the needs not only of the City of Detroit but also of the state’s local governments with their varied local economies, it would be an opportunity to lift Michigan’s overall economic health.

IN A NUTSHELL

 -- The City of Detroit has economic momentum. It is hosting more visitors, sports and cultural events, and corporate conferences. However, the additional public costs that come with this economic uptick – such as public safety, sanitation, and infrastructure – are largely borne by city taxpayers. City leaders are exploring ways to benefit from the economic momentum to support municipal services and/or potentially provide residential tax relief.

 -- City leaders are exploring the attributes of a tax on ticketed entertainment events and a local sales tax. While both new taxes could diversify and modestly increase the City of Detroit's revenues, their authorization and enactment present significant hurdles. In other cities, either tax may not be the most suitable. Furthermore, these two taxes would not be practical for diversifying revenues in rural areas of the state. If consideration is limited to only these two options, policymakers will miss an opportunity to improve Michigan’s municipal finance system more broadly.

 -- State and city policymakers should aim for material change in municipal finance. As a catalyst for change, Detroit could lead communities statewide to pursue comprehensive reforms that meet the varied needs of local economies. Not only would all cities, including Detroit, benefit by gaining local revenue options, but Detroit would also win allies as they drive an effort to lift the state’s economy overall.

How much lottery ticket cash ends up in Michigan classrooms? We did the math, Bridge Michigan (February 4)

Why Detroit needs more money — and how it could be raised, WDET-The Metro (February 4)

Michigan Matters: A new entertainment and sales tax for Detroit? Michigan Matters CBS Detroit (January 30)

Desperate for doctors: Michigan looks to expand who can provide care, Bridge Michigan (Jan. 29)

How much is too much? Social media users question the Kalamazoo city manager's pay, WMUK (January 29)

Evaluating a Local Sales Tax Option for Detroit, Michigan Business Network (January 28)

Minimal Population Growth Hasn’t Changed CRC Population Recommendation, MIRS (January 27)

Could Detroit Add a Local Sales Tax? City Leaders Take a Look., Michigan News Source (January 27)