Plan to shed Detroit schools debt would spread costs to other districts, according to report


The proposal to have the state of Michigan assume Detroit Public Schools' debt would spread the costs to "all other taxpayers and school districts" in the state, according to a report from the nonpartisan Citizens Research Council

The concept — something not unprecedented, says the council — was first offered by a coalition that issued a set of recommendations last month on how to fix DPS. It also comes on the heels of a plan from Gov. Rick Snyder, who reportedly will seek to split DPS into two separate entities

DPS has a required $53 million annual tab in principal and interest payments on its long-term debt, the report notes, which is covered by the state's per-pupil foundation allowance. The coalition, in its recommendations, said the state should assume $124 million annually of DPS' financial obligations for debt service and legacy costs. 

The district currently receives $72 million from an 18-mill non-homestead property tax, according to CRC. If that money was instead spent to cover DPS debt, that means the state would require the state to spend an additional $72 million to cover the lost per-pupil funding amount. In doing so, that would cost about $50 per pupil in the state, according to CRC's analysis. 

Check out the full report here


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