Updated April 2026 · U.S. Census Bureau, fiscal year 2023
Is Ann Arbor, MI in Financial Trouble?
Yes — Ann Arbor, MI shows real signs of fiscal stress. Its D grade (46/100) puts it in the lower tier of cities its size, with multiple pressure points, debt burden, pension underfunding, or recent operating deficits, weighing on the score. Bond raters and state oversight officials tend to watch D-grade cities closely.
Ann Arbor, MI Budget Snapshot
| Total Spending | $2.7B |
| Per Capita Spending | $22,006 |
| Total Revenue | $2.8B |
| Total Debt | $357.2M |
| Debt Per Capita | $2,923 |
| Population | 122,216 |
| Fiscal Health Score | 46/100 (D) |
| Data Year | FY 2023 |
Fiscal Health Score Breakdown
Ann Arbor's D grade is the weighted average of six factors, each scored 0–100. Its strongest input is Revenue Diversity (100/100); its weakest is Debt Burden (per capita vs peers) (0/100). The weakest factor is where budget pressure is most likely to surface first.
What Does the D Grade Mean?
Ann Arbor, MI earns a D on the CitySpend Fiscal Health Score (46/100). Multiple stress indicators, debt burden, pension underfunding, or a recent run of operating deficits, are flashing. Bond raters and state oversight officials typically pay closer attention to D-grade cities.
Debt Burden in Context
Debt-wise, Ann Arbor sits close to the peer median for cities its size: $2,923 per resident versus a peer-group median of $0. That tracks with normal capital-program borrowing for streets, water, and public buildings.
Where the Money Goes
Of the $2.7B that Ann Arbor, MI spent in its most recent reported fiscal year, the largest single line item per resident is Parks & Recreation at $1,799. Fire Protection comes next at $1,572 per resident. Together those two functions account for the bulk of every-day taxpayer-facing services in the city budget. The remaining categories, parks, health, housing, debt service, and general administration, fill out the picture.
Top Spending Categories (Per Capita)
Where the Money Comes From
Where does the money come from? Property tax provides 0 percent of city revenue, sales tax 2 percent, intergovernmental transfers from federal and state sources 16 percent, and direct charges and user fees 13 percent. The remainder comes from utility revenue, income tax (where applicable), and miscellaneous sources.
How This Score Is Calculated
The CitySpend Fiscal Health Score combines six factors into one composite, drawn from the U.S. Census Bureau Annual Survey of State and Local Government Finances: budget balance and reserves (25%), debt burden per capita versus peer median (20%), pension funded ratio from the Public Plans Database (20%), spending efficiency (15%), revenue diversity (10%), and three-year trend direction (10%). Best-practice weighting follows guidance from the Government Finance Officers Association (GFOA). Read the full methodology.
More about Ann Arbor, MI
Yes — Ann Arbor, MI shows real signs of fiscal stress. Its D grade (46/100) puts it in the lower tier of cities its size, with multiple pressure points, debt burden, pension underfunding, or recent operating deficits, weighing on the score. Bond raters and state oversight officials tend to watch D-grade cities closely.
The data source behind this answer is the Census Annual Survey of State and Local Government Finances. Every figure on the page traces back to that source; the methodology page describes the inputs and the refresh cadence in full detail.
A practical caveat: the headline answer above reflects the most recent the Census Annual Survey of State and Local Government Finances vintage; underlying data is often revised for months after first publication, and the right reference for any specific decision is whichever vintage is current at the time of the decision. The as-of date is stamped on every page.