Detroit’s public‑school system took a decisive financial step on Tuesday. Superintendent Nikolai Vitti announced that the legacy Detroit Public Schools (DPS) has made its final principal payment of $4.5 million and a final interest payment of $27,000, fully retiring the operating debt that has burdened the district for a decade.

With the debt cleared, the school board approved the transfer of the remaining $190.8 million balance to the Detroit Public Schools Community District (DPSCD), the entity created in 2016 to handle day‑to‑day school administration while DPS retained the legacy debt.

New summer millage to fund operations

Voters approved an 18‑mill levy in August that authorizes DPSCD to collect the revenue it needs to operate. The board also authorized a summer tax levy, beginning next July, that will apply to businesses and owners of rental properties. The levy can be renewed each year until the board decides to revoke it.

For most Michigan taxpayers, summer taxes become a lien on July 1 and are due by September 14; winter taxes become a lien on December 1 and are due on February 14. Board President LaTrice McClendon explained, “By collecting the funds in July, the district will receive collections in the summer to support school operations until state funding is received in October.”

Why the millage matters

The $120 million the millage is expected to generate represents only a fraction of DPSCD’s $1.1 billion budget, but it is critical for day‑to‑day operations. Vitti noted that the projected revenue would provide roughly $2,400 of the $10,300 per‑pupil amount the district receives from the state.

Previously, the operating millage was collected by the legacy DPS entity. A court ruling earlier this year required DPS to stop collecting that tax, prompting DPSCD to seek its own millage approval. The new levy does not affect homeowners and applies solely to non‑homestead properties.

Background on DPSCD

DPSCD was formed in 2016 as part of a legislative effort to address mounting debt in the original district. While DPSCD began debt‑free, the state filled the gap left by the lack of local property tax revenue with money from the 1998 Tobacco Settlement Fund. Vitti emphasized that starting next fiscal year, DPSCD will rely on its own local funding and no longer depend on the tobacco settlement.

Chalkbeat Detroit Bureau Chief Lori Higgins and reporter Hannah Dellinger contributed to the original report.

Original reporting: BridgeDetroit — read the source article.