Oakland Unified School District’s projected $100 million budget deficit for the next school year could be halved to around $50 million, school leaders revealed this week while warning that significant changes must still be made.
Initial measures credited with slashing the looming budget gap include a three-week freeze on non-essential spending. The district did not immediately provide how much money the freeze saved. Future cost-saving moves could include re-evaluating school-site spending, and reducing staffing, including through retirements, not filling open jobs and eliminating duplicate positions.
The district may explore property tax measures and private grants to generate additional revenue, according to a presentation by a private firm hired by the district at a special meeting on Tuesday, which outlined initial cuts.
But district superintendent Denise Gail Saddler acknowledged that hard decisions remain, including further, painful cuts like layoffs.
“We must still make significant changes to our personnel and programs in the central office and in schools, and to how the district conducts the business of educating children,” Superintendent Denise Gail Saddler said. “But I am pleased with the progress when looking at the overall budget as compared to just one month ago. … My primary goal is to ensure the district remains on solid financial footing and away from falling into receivership again.”
Saddler and district leaders will present a finalized budget-balancing plan at next week’s board meeting, which board members will vote on by mid-February, according to board member Mike Hutchinson. Hutchinson criticized Saddler’s claim that initial and future cost-saving measures have successfully halved Oakland Unified’s projected budget deficit and said he hasn’t seen any numbers or documents to back it up.
“There is no plan that currently exists, not even part of a plan,” Hutchinson said Thursday.
The projected decrease in the budget deficit comes after several months of financial crisis at Oakland Unified, which was once projected to run out of cash as early as fall 2025. In June, the district exited state oversight after more than 20 years of fiscal supervision from the Alameda County Office of Education and the state, following an emergency $100 million state loan in 2003.
But in the months that followed, the district faced tumultuous leadership turnover after the ousting of former longtime superintendent Kyla Johnson-Trammell and additional financial uncertainty. In November, the district’s current superintendent Saddler warned the community that significant, painful cuts would need to be made to balance the district’s finances. And last month, the district’s school board approved a $103 million budget plan that included vague cuts, a temporary spending freeze and hopes that boosted attendance rates could generate additional revenue.
The district paid the Illinois-based consulting group Hazard, Young, Attea & Associates $415,000 to develop a plan to reduce the projected deficit. According to the firm’s analysis, Oakland Unified’s actual spending exceeded its budgeted expenses for the 2023-24 and 2024-25 school years — sometimes by more than $50,000.
Saddler said the temporary spending freeze resulted in a 10% reduction of unencumbered school funds — money that has not been committed to specific expenses — while district administrative departments absorbed 20% in reductions. She said the reduced spending stabilized the district’s funds through June and leaves the district in better financial shape than expected.
But she acknowledged that some of the district’s budget-balancing efforts are long-term while others are not, and while the efforts give Oakland Unified more time to address core financial challenges, the district must still make crucial changes to close the remaining $50 million deficit.
“I am confident that we will be able to make the necessary changes, although they will not be easy,” Saddler said. “But with students remaining at the center of everything we do, I know we can keep the most important work, providing our students a world-class education, on the right path well into the future.”
The district has been reluctant to close school sites or issue layoffs to address its financial woes, despite pressure from former superintendent Johnson-Trammell and senior staff. Plans to close or merge schools have stalled in recent years without board support and amid community outrage.
In a statement Tuesday, Oakland school board vice president, Valarie Bachelor, encouraged raising staff wages and limiting layoffs amid ongoing budget conversations, which she said must be student-centered.
“I support taking all the steps necessary to raise wages for all staff, especially our lowest-paid staff, and limiting our use of layoffs as a budget-balancing tactic,” Bachelor said. “We are, after all, a public school district that must educate students in the City of Oakland.”
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