Detroit Schools in Debt?
WIPE OUT the Debt!

Dec 16, 2024

The Detroit Public School Community District (DPSCD) is on the hook for 3.5 billion dollars in “legacy debt”—debt incurred by what was once called DPS, Detroit Public Schools, before 2016, and debt incurred since then. Recently the Detroit Schools superintendent said the district is on track to make its last payment on the old district’s debt, of 1.8 billion, in March, using proceeds from an 18-mill tax levied on non-homestead properties. Since 2016, this has been the means used to pay off the debt.

But in response, State Treasury officials say that once DPS operating debt is fully repaid, proceeds from the levy must go to district operations, and not outstanding debt. Without these non-homestead tax funds, the superintendent said the district won’t be able to repay the rest of the debt, possibly not until 2040, costing taxpayers about 326 million dollars more interest.

There is a long history—a tangled web—that goes into understanding how Detroit’s public schools accumulated so much debt in the first place. You could go back to as far as when big auto plants were shut in the 1980s; people lost their jobs and their homes, and property taxes, that had been used to fund public schools, went to hell in a handbasket.

Governor Engler changed the way schools were financed, changing from property taxes to the state providing the main financing—on the basis of per pupil funding. Soon thereafter, the growth of charter schools and “schools of choice,” where students could attend schools outside their district, and their funding would follow them, led to money being drained from the Detroit Public Schools.

And yes, there were a few bad apples in school administrations who siphoned off some funds for personal gains.

But over the years, a whole series of steps were taken by the state to take over the school district and have it overseen by emergency financial managers, like the notorious Robert Bobb, appointed by Democratic governor Jennifer Granholm and known as “Rob Bob” by Detroit residents. Under a whole series of “emergency managers,” expensive consultants were hired. Bobb cut the workforce by 25% and privatized custodial and other services. Fifty-nine buildings were closed. Between the exodus to charter schools and schools of choice, enrollment fell and, no surprise, deficits grew. And so the emergency managers went to the legislature to ask them to guarantee money for more bonds—which are, in fact, gifts to the banks, paying interest.

This pattern was repeated over and over again under each of the four emergency managers: close schools, drive more students out of the district, take on more debt. Use the debt to justify more closings … repeat.

In the 1970s, there were 370 public schools in Detroit. Today, there are about 110. Today, there may be 48,000 kids in Detroit public schools, while there are many more Detroit kids in charter schools and out of district.

And every time you turn around, the conversation is about how much more taxpayers must pay in interest because of the debt. How much more of the per-student funding from the state should go right back to the banks to service the debt, before the funding can ever reach the schools.

Never is the conversation about the fact that, in the last 10 years, more than one billion dollars intended for Detroit’s schools, libraries and other city services have been used to pay for real estate projects that benefit wealthy investors. Or the fact that 2.1 billion in tax money has been given away to rich corporations for projects such as battery plants in Michigan.

The working class of Detroit, the children of Detroit, the teachers and other school employees of Detroit need a real solution: wipe out the debt. The State created it, not them. Return all schools to public schools, in Detroit, and fully fund them. The money is there.