Detroit voters in August will have the chance to weigh in on a new operating millage for the Detroit school district.
The Detroit Public Schools Community District Board of Education, during its Tuesday night meeting, approved a resolution for the millage, as well as a $1.4 million contract with public affairs firm Compass Strategies for a voter education campaign on the millage through June 30, 2027.
DPSCD will ask voters to support its collection of an 18-mill levy, which has been collected by Detroit Public Schools and last renewed by voters in 2024. The millage will not affect homeowners, but the tax would be for non-homestead properties, such as businesses and people who own rental properties, Superintendent Nikolai Vitti said Tuesday.
“This isn’t a new tax or a higher tax. It’s just basically switching the current DPS millage to a DPSCD millage, which now runs our district,” Vitti said at Tuesday’s meeting.
If the millage fails in August, then the proposal will appear on November’s ballot. If it does not pass then, the district may have to pay between $1 million and $2 million to the city to hold a special election in May 2027. Vitti said at a meeting last month that DPSCD must get voter approval to collect the operating millage by July 1, 2027. If voters reject the millage by that date, then DPSCD will go into a $120 million deficit.
Vitti explained at Tuesday’s meeting that in order for a district to receive state aid, it has to tax 18 mills, which is mainly a tax on businesses, he said. If the revenue is less than the minimum per pupil amount – $10,050 per student – then the state makes up the difference, which is the case for the Detroit school district.
“Districts like Birmingham, Southfield and Bloomfield Hills generate more than $10,050 per student and they keep that money,” Vitti said. “That money is flexible and you can apply it to school buildings, teacher salaries and at-risk programs.”
In 1994, voters approved a new system for funding schools known as Proposal A. It led to three key changes, including eliminating the use of local property taxes as a source of school funding and creating a new state education tax. School districts began to get per-pupil payments from the state called the foundation allowance.
The three suburban districts Vitti mentioned are considered hold harmless districts, where local taxpayers contributed more than $6,500 per pupil prior to Proposal A’s passage, reported Bridge Michigan. These districts tend to be wealthier and are allowed to continue to pay additional local property taxes for their schools’ operations, exceeding the maximum foundation allowance.
State Judge Christopher P. Yates, who issued a summary judgment last month in favor of the Treasury Department, said state law will not allow Detroit Public Schools to continue to collect operating revenue to pay off its capital debt ahead of schedule, as proposed by DPSCD.
The district is appealing the Court of Claims’ decision and are waiting for a decision while they begin the process of putting the operating millage on the ballot.
Detroit school district’s history with tax revenue
In 2016, lawmakers created a new district to resolve a debt crisis in DPS. The new district, now known as DPSCD, took over day-to-day school operations, while DPS remained only to collect tax revenue to pay off its existing $3.2 billion debt.
Since DPSCD would not receive local property tax revenue, the state then filled the gap with money from the 1998 Tobacco Settlement Fund.
In late 2024, DPSCD ran into a disagreement with the Treasury Department, as higher property values in the city accelerated a $150 million emergency loan repayment.
District officials wanted to use operating revenue to speed up its payment of the remaining $1.3 billion in capital debt and $355 million in debt to the state’s School Loan Revolving Fund.
A separate debt millage had been paying off the capital and revolving fund debts, but DPSCD officials have said the move would allow the debt to be paid off years earlier, saving taxpayers about $326 million in interest costs.
But the Treasury Department said state law does not allow operating millage to be used for non-operating debt. The department’s position was that DPS could no longer collect the operating millage once the emergency loan was paid off.
Because the two could not agree and proposed legislation that would have changed the law failed, DPSCD sued the state in December 2024.
In February 2025, the court denied the district’s request for a preliminary injunction to require the state to continue making payments to DPSCD and allow DPS to keep collecting the operating millage as the case continued.
Though the court recognized the potential benefit to taxpayers if DPS were allowed to pay off the remaining debts faster, Yates sided with the state, saying there was no way to allow the district’s request based on existing law.
The final order also said DPS will remain intact to continue to collect debt millages to pay off the remaining loans by around 2040.
At Tuesday’s board meeting, Vitti said the operating debt should be paid off at the end of the year.
“This means that DPSCD will now function normally from a revenue point of view like every other district in Michigan,” he said.
What are others saying about the millage?
Vitti’s Tuesday presentation on the millage did not prompt much discussion from the board, but member Ida Short asked what the average homeowner will have to pay annually for the millage.
Vitti said only homeowners who rent out their property would have to contribute, and that he will work with the city to find out how many homeowners would be affected and the amount they will have to pay.
Additionally, Short told BridgeDetroit that while she understands why the district needs a millage, business owners shouldn’t have to pay off a debt that exponentially grew when DPS was under state-appointed emergency management.
In 2016, a report from the Citizens Research Council of Michigan showed that the district’s total debt topped $3.5 billion. DPS repeatedly took out short-term loans but through refinancing, converted them into long-term liabilities that became a financial burden. Most of that was done by the five emergency managers that ran the district from 2009 to 2015.
“We’re being squeezed by the state, and we’re squeezed because we’ve got to help the community and students with their education,” Short said. “We’re in a pickle, more or less. We have to have the money. But my point is, this money we should not have to pay. The state should eat the debt that they created.”
Aliya Moore, a DPSCD parent, said she plans to vote “no” on the millage until the district has conversations on a new literacy plan and consolidating schools. During public comment, Moore claimed that the district is not mentioning its phase-out plan for 19 DPSCD schools due to low enrollment. She believes that DPSCD is giving off the illusion of a thriving school district
“We keep voting ‘yes’ and yet, our district is at the bottom in the state,” she said.
Detroit activist and former Detroit library commissioner Russ Bellant said he supports what Vitti and the district are doing to reduce long-term costs and pay off its debt. From watching the state takeover of DPS in 1999, to the dismantling of the district in 2016, he wants to see the district thrive. Bellant said he wants big business to pay their share of property taxes for the millage.
“We need some reconciliation from those who’ve benefited (from tax captures) to pay back, and helping the school district pay off that debt is just common sense,” he said.
Chalkbeat Detroit reporter Hannah Dellinger contributed to this report.