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If you’re a Detroiter heading to the polls for the Aug. 4 primary, or someone voting early, you’re likely asking yourself one big question: Why are we voting on another school operating millage?
The answer is a bit complicated. Yes, in 2024, Detroiters easily approved an operating millage renewal — the technical term for a tax levy on some real estate — for Detroit Public Schools. That’s the entity that used to educate students in the city, but since 2016 has only existed to collect tax revenue and pay off old debt.
But a lot has changed in the last two years. The Detroit Public Schools Community District must now seek its own operating millage for two key reasons:
- The DPS millage will be done paying off old operating debt in September and must cease collecting operating tax revenue.
- The operating revenue the state has been providing to DPSCD since state lawmakers created the district in 2016 will be eliminated, per the budget lawmakers approved July 3.
That means DPSCD must collect its own operating revenue, through a millage every Michigan district is required to levy.
There’s a lot at stake if voters reject the millage — more than $100 million in annual operating revenue for Detroit’s schools.
Below, we answer some important questions about the millage,. Have a question you don’t see answered? Reach out to us at detroit.tips@chalkbeat.org.
What is this millage for?
The Detroit Public Schools Community District is seeking an 18-mill operating millage, which equates to an $18 tax for every $1,000 of taxable value, for 20 years that will provide revenue for general operating expenses that can range from classroom programming and supplies to staff salaries. It can’t be used for capital projects.
Who’s affected by this millage?
Anyone can vote on the proposal, as long as they’re registered. But the operating millage is levied on commercial property, rental property, and vacation property. It doesn’t affect primary homeowners. So, if you own and live in your own home, this vote doesn’t affect you.
So what’s the difference between Detroit Public Schools and the Detroit Public Schools Community District? And why is there a change in which of them will collect operating revenue?
DPS was the district that for years educated students and operated schools. But DPS debt had grown over time, and most of it accumulated when the state controlled the district. That cut into the amount of money for classrooms.
To avoid what many thought was looming bankruptcy, lawmakers created DPSCD in 2016 as a separate district. Lawmakers transferred control of schools from DPS to DPSCD, and the new district benefitted from a fresh, debt-free start. DPS remained intact solely to collect revenue from millages. That revenue goes toward paying off the lingering DPS operating debt. (A separate debt millage is paying off capital debt and debt to the state’s revolving loan program.)
Meanwhile, because operating revenue was going to pay off debt, the state beginning in 2016 provided what DPSCD would have received from a millage.
But the state budget approved Friday eliminates $124 million for operating costs the state would have provided to DPSCD next year. It assumes the district will receive those funds from a millage.
Lawmakers made that move because rising Detroit property values mean the debt will be paid off much earlier than planned. DPSCD officials wanted to keep the DPS operating millage revenue flowing to help pay off the rest of the old debt. But the Michigan Department of Treasury said that’s prohibited by state law, and a lawsuit brought by the district ended with the courts siding with the state.
How much money would be generated by this millage?
The millage would generate about $112 million during the 2026-27 school year. DPSCD’s total budget for the coming school year is around $1.1 billion. State and federal funding provides the rest.
Are operating millages required?
Yes, traditional school districts are required to levy an $18 tax for every $1,000 of taxable value to generate operating revenue. DPSCD was an exception during its first 10 years.
Charter schools do not have millages and do not receive millage revenue, except in the case of a countywide school millage.
Why is this vote being held now?
The Aug. 4 primary is the first opportunity for DPSCD to put the proposal on the ballot since the district lost its battle with Michigan Treasury officials in court. If it doesn’t pass next month, the district can revive it during subsequent elections, with the first opportunity being the Nov. 3 general election.
The district could also opt to hold a special election, but that would be costly.
What happens if voters reject the proposal?
DPSCD Superintendent Nikolai Vitti said that if voters don’t approve the tax levy by July 1, 2027, the district would face a deficit of $111 million for the 2027-28 school year.
What is unclear is whether the state’s elimination of the operating revenue for the district for the 2026-27 school year will also lead to a shortfall. Vitti said the only way for the district to get its full $10,300 in per-student funding allotted to it by the state “would be to force the tax collections from DPS to DPSCD.” There is no other source of funding the district could tap to fill that gap, he said.
What if tax collections fall below 100%?
Approving the measure is one thing. Taxpayers still must pay their tax bills for the district to collect the projected revenue.
The state has provided DPSCD with 100% of what a millage would have generated. That may not be the case when the district has to rely on actual millage revenue. If property owners don’t pay their bills, less revenue will be generated. The ballot language says revenue generated would be $112 million; Vitti said that assumes a 92% collection rate.
Vitti said he has raised this issue with legislators. It is something that could affect every school district in the state.
“This makes no sense to me from an operating point of view, that you would put a school district in jeopardy of not having as much revenue as they should because of local property tax collection,” Vitti said during a May school board committee meeting. “This is 2026; we shouldn’t be funding school districts like this.”
How will tax incentives affect how much money the district receives for operating purposes?
Vitti said city incentives designed to boost economic development but which reduce tax revenue wouldn’t affect how much operating revenue the district receives, as long as the collection rate is 100%, because the state reimburses the abatements on the operating millage.
In a 2021 Detroit News opinion piece, the authors noted that communities “can offload the cost of their economic development deals onto taxpayers and schoolkids statewide. As a result, these deals receive less public scrutiny, because the state will make up most of the difference anyway.”
Lori Higgins is the bureau chief for Chalkbeat Detroit. You can reach her at lhiggins@chalkbeat.org.
Lori Higgins 2026-07-13 10:00:00
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