Detroit’s old school district pays off its operating debt and shifts the 18-mill tax

DETROIT — The old Detroit Public Schools entity has paid off the operating debt it has carried since the state split the district in 2016, and the school board has moved the 18-mill tax that paid that debt over to the district that runs the schools. Superintendent Nikolai Vitti announced the payoff Tuesday. The board approved the transfer the same night.

Micah Walker’s account in BridgeDetroit, also published by Chalkbeat Detroit, says the legacy district took a state emergency loan in 2016 and paid it about a year and a half early. The money came from the 18-mill tax on businesses, rentals, and other property that is not a homeowner’s primary residence. Voters approved moving that millage to Detroit Public Schools Community District in August. The board then authorized a summer levy, starting next July and collectible each year through 2045. As a new taxing body, DPSCD had to pass its own resolution before it could collect.

Vitti said the last principal payment was $4.5 million and the last interest payment was $27,000, both in September. District documents he cited put the remaining millage fund balance at $190.8 million, to be transferred to DPSCD. The millage is expected to bring in $112 million in 2026, a slice of a $1.1 billion budget. Vitti has said that sum is about $2,400 of the $10,300 per pupil the district counts from the state. Board president LaTrice McClendon said collecting in July gets cash into the schools before state aid arrives in October. Summer taxes become a lien July 1 and are due Sept. 14. Winter taxes become a lien Dec. 1 and are due Feb. 14.

The operating debt is not the capital debt

What is gone is the operating debt. What is not gone is the capital debt. BridgeDetroit, citing district documents, puts that balance at $1.5 billion as of July. The old district paid $24.3 million in interest in October and is scheduled to pay $139.2 million in interest and principal in May. A Detroit City Council policy-division document the story cites expects that debt to be finished in 2040. The district was created in 2016 so the new system could run schools without the old bills, while the old system kept the taxes and a combined operating and capital load that then stood at $3.2 billion. The state filled the operating gap with 1998 tobacco-settlement money. Vitti said that subsidy ends next fiscal year, because DPSCD now has its own local tax, “like every other district in Michigan.”

A court decision earlier this year said the old district had to stop collecting the operating millage once that debt was nearly repaid. The August vote and Tuesday’s resolution are how the tax continues, under the new district, through 2045. The millage itself was last renewed in 2024. Homeowners do not pay it.

Two official numbers that do not match

The state’s Financial Review Commission, in minutes of its Sept. 28 meeting, recorded that on Sept. 1 every outstanding operating obligation of the old district had been paid, and that the state treasurer sent Bank of New York Mellon a certificate under the 2016 debt indenture. Those minutes put the operating-debt reserve at $194.8 million as of August. BridgeDetroit’s district documents put the balance to be transferred at $190.8 million. This story does not pick one. The certificate says the operating debt is paid. The two balances are a month and a purpose apart, and neither page explains the $4 million gap.

A separate DPSCD October highlights page says the district made a final payment “last month” on operating debt and that about $1.5 billion in remaining operating debt is due by 2040. BridgeDetroit calls that $1.5 billion capital debt, not operating debt. The pages disagree on the label. The payoff of the operating loan is the fact both the treasurer’s certificate and Vitti’s Tuesday announcement support. The photograph is Cass Tech in 2010. It is not Tuesday’s meeting.

Sources:
BridgeDetroit, Micah Walker, “Old Detroit school district pays off decade-long operating debt as board transfers millage,” Nov. 11, 2026, https://www.bridgedetroit.com/old-detroit-school-district-pays-off-decade-long-operating-debt-as-board-transfers-millage-remaining-liability/
Detroit Financial Review Commission, school-district minutes, Sept. 28, 2026, https://www.michigan.gov/treasury/local/fiscal-health/detroit-frc/district/detroit-2026-frc-school-district-resolutions-and-meetings/detroit-frc-school-district-meeting-minutes-september-28-2026
Photo: Albert duce, “Cass Technical High School 2010.jpg”, Wikimedia Commons, CC BY-SA 3.0, https://commons.wikimedia.org/wiki/File%3ACass_Technical_High_School_2010.jpg

Detroit

Tags: Detroit · DPSCD · Schools · Taxes