According to FCMAT CEO Michael Fine, the district's own financial forecast shows it will run out of cash by July. FCMAT confirmed the projection while examining what options remain for the 2026-27 fiscal year.Fine said the district may have enough short-term options to stay afloat through late January or February 2027. Those options include borrowing internally from district funds and receiving an advance on future property tax revenue from Sacramento County. Under that process, the county would provide estimated property tax revenue months early to help bridge the district through the first half of the fiscal year.
The bigger challenge, Fine told CBS News Sacramento, is timing.
If time passes and the board is unable to get its request on the legislative schedule, they risk running out of cash. "If they don't [make a decision] they're gambling with their ability to pay their employees," said Fine. If the board requests state assistance, the state can appoint an administrator and reduce the authority of the elected school board -- a process Fine said mirrors bankruptcy protections. Ultimately, the appointed administrator would hold the responsibilities of the superintendent and the board in one role.
Fine warned that even with state intervention, painful financial decisions are likely ahead.
This is not the first time FCMAT has intervened in Sacramento City Unified. The agency last reviewed the district in 2018, and Fine said many of the same issues remain unresolved.
During the pandemic, large amounts of federal and state relief funding temporarily stabilized the district. Like many school systems, Sacramento City Unified expanded staffing and services during that period. But Fine said those funds are now gone while spending levels remain high.
Fine said district leaders must now decide quickly whether to pursue state assistance. California law requires school boards to hear public testimony before formally requesting help from the state if the school board pursues this route.
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