Oakland Unified officials search for ways to cut costs to avert looming budget crisis
Oakland school district officials have been given a wake-up call by county officials about a looming budget crisis that could spell disaster if it isn't addressed soon.
The Alameda County Superintendent of Schools issued a stark warning to the Oakland Unified School District (OUSD) earlier this week, urging immediate financial action to avoid a potential bankruptcy.
District officials estimate a $95.7 million deficit for the next school year that starts in the Fall of 2025. If officials don't make significant budget cuts by June, the OUSD could run out of money by November, leading to the possibility of another state bankruptcy loan and increased state oversight.
The district has struggled with budget deficits for years. Critics argue that the school board has failed to make tough decisions to address the current issues. Instead of reducing costs, the board voted against closing schools and approved raises for teachers. Alameda County Superintendent Alysse Castro emphasized that this approach could lead the district down a path toward bankruptcy.
Karina Flores, a parent of an OUSD student, expressed relief when the school board voted to keep her daughter's school, International Community School (ICS), open. Flores, who attended a bilingual school herself, chose ICS because it offered a bilingual curriculum, which she feels is important for her daughter's education.
"She loves ICS because of her teacher, Ms. Sarah," Flores said.
District officials had previously suggested merging 10 schools that share campuses to save money, but the board instead chose to look at laying off administrators and educators as a way to address the deficit.
Mike Hutchinson, OUSD School Board Director for District 4 and Chair of the Budget and Finance Committee, said the district needs to prioritize its spending and make adjustments to its budget. Hutchinson noted that the district has been grappling with a range of financial challenges, including nearly $100 million in negotiated raises for employees.
"We have to get our priorities in order," Hutchinson said. "We probably tried to spend on too many priorities. And all of these things together forced us to adjust the budget going forward."
Hutchinson noted that the school board must act quickly. If the board does not approve a budget adjustment package in February, it could trigger a series of negative consequences, including being locked into the current budget and facing an even steeper financial decline.
OUSD has a troubled financial history. In 2003, the district was placed under state receivership after taking out a $100 million loan from the state. The district is set to emerge from receivership in the Summer of 2026, but the Alameda County Superintendent warned that without significant spending cuts, OUSD could find itself in another financial crisis, potentially remaining under state control for many more years.
Some OUSD parents, like Rosa Vargas, are expressing concern over the district's financial problems with a certain amount of cynicism.
"I don't mind the state taking over," Vargas said. "Maybe the state does need to take over to do the checks and balances."
Hutchinson, however, said there is no financial mismanagement and they're working quickly to resolve the budget gap.
"We're at the point now where doing nothing is not an option," he said. "And I would argue throwing our hands up and saying 'oh, that's just the same old OUSD,' that is not an option either."
OUSD officials said aside from layoffs, the school board will likely have to revisit school mergers in June. Flores, while acknowledging the difficult road ahead, remains hopeful.
"It's going to be tough," Flores said. "Hopefully, it doesn't get really bad. All we can do is to prepare ahead."
The district's teachers' union, meanwhile, is vocal in its opposition to the potential layoffs. In a statement, OEA president Kampala Taiz-Rancifer said, "This manufactured budget crisis can be solved by working with Oakland educators to ensure our schools are thriving and joyful places for every student to learn, grow, and dream."
As the district continues to grapple with its budget woes, the need for swift and decisive action has never been more urgent.
