According to officials, if the Oakland Unified School District’s Board of Education does not take action to address the significant budget shortfalls anticipated for this school year and the following, the district’s schools may run out of money by November.
Alameda County Superintendent of Schools Alysse Castro wrote to OUSD on Tuesday, stating that if the district’s board does not act by June, OUSD may run out of funds and once more come under the watchful eye of a state trustee, which would take away its local decision-making authority.
Castro supplied budget data in her letter to OUSD Superintendent Kyla Johnson-Trammell, indicating that the district is expected to see a $99.6 shortfall for the 2026–2027 school year and a $95.7 million loss this year.
Castro wrote, “This is not an abstract problem,” “Without significant intervention, the district is projected to run out of cash during the 2025-26 school year, leading to significant destabilization for students and staff, necessitating another bankruptcy loan from the state, and forfeiting local decision-making authority.”
The letter was sent in reaction to the district’s decision to submit a “negative certification” of its budget, acknowledging that it would not be able to pay its debts for the current and upcoming academic years.
According to Castro, the district’s 2009 findings—that it has too many schools for the number of students in the district, too many small and under-enrolled schools, and that it doesn’t meet the needs of students and families in every neighborhood—remain the same as the current issues.
In addition to requiring the county to take one or more steps to assist the district in escaping its financial predicament, the designation automatically attracts extra attention from state and county education officials.
Castro said Tuesday that she would be sending a fiscal advisor to assist the district in implementing its “3Rs process,” which consists of rethinking the district’s “footprint,” restructuring services, staffing, and resources, and redesigning to promote equality and student results.
According to Johnson-Trammell, the district is prepared to collaborate with the county in order to resolve its present financial predicament.
“The OUSD leadership team understands ACOE’s recommendations, and we will work closely with the appointed fiscal advisor to take every action possible to maintain our local control and put OUSD on a sustainable financial path toward a vision of a district that prioritizes educational efficacy and equity,” Johnson-Trammell said in a statement issued on Wednesday.
According to Castro’s letter, the district, which has experienced a decline in enrollment, needs to overcome “governance and operational dysfunction” and cease postponing, avoiding, or changing tough decisions in order to meet its objectives.
Castro used the district’s 2023 choices to pay teachers salaries without cutting expenditure elsewhere and to withdraw from a proposal to close schools as examples.
Additionally, she stated that OUSD will be the only district to have a state financial trustee and a county financial advisor working together to guide its decisions.
The district was forced to take out a $100 million state loan in 2003 after going into receivership, and the trustee was appointed. The district has nearly worked itself out of this arrangement.
The state will step in once more if it is unable to resolve its present budgetary issues.
A request for comment was not immediately answered by Oakland Education Association teachers’ union representatives.
Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.