Oakland's School District Must Cut $100 Million. Its Proposed Plan Doesn't Get Close

As Oakland’s school district faces fiscal insolvency, its top budget official is warning that the school board’s unwillingness to cut services could make it impossible to balance a budget next year.

Last month, Oakland Unified School District’s board directed staff to prepare two plans that cut $100 million from the 2026–27 budget to stay afloat. That demand came with broad parameters: no school closures or mergers, maintaining school resources and student-facing roles and reducing the district’s administrative arm — the “central office.”

“We’re a school district. And a school district’s majority of its funds are in schools,” Chief Business Officer Lisa Grant-Dawson said. “There’s not $100 million in the central office.”

The two budget scenarios staff plan to present to the school board on Wednesday would cut far less than their goal. The more scant version would total $21.8 million in savings and recommends cutting 53 roles across administrative offices, with the greatest reductions in communications and the Superintendent’s office, a department which trains and supports new employees, fiscal services and academics. The other would only cut six roles and save the district $16.8 million.

Board President Jennifer Brouhard, who co-authored the resolution directing staff to propose the cuts, said it was an “initial direction,” but that she and other board members “understood from the start that further discussions with the Superintendent would be necessary to identify additional cuts.”

She said the board also asked staff to consider other elements of the district’s spending, including a potential restructuring of its school “networks,” or groups of schools that are under the purview of a network superintendent, and plans to increase revenue through enrollment and identification of services that the district can deliver in-house instead of contracting out.

“At our next special meeting on Dec. 3, I am excited to see plans for the remaining components of the resolution,” Brouhard said via email.

The budget crisis comes after years of warnings from state watchdogs and county and district officials that OUSD is outspending its revenue, setting it on the path toward bankruptcy. The district did declare bankruptcy in 2003 and was bailed out by a loan from the state that came with decades of intense oversight, but made its final loan payment over the summer.

Even so, the past few years have been rocky — OUSD has outspent its revenue by up to $4 million per month, forcing service cuts and spending down a strong reserve fund built up during the pandemic, when schools received hefty relief payments from the federal government.

Some board members and the teachers’ union have long blamed OUSD’s central office for the overspending problem, calling it bloated and pointing to the high salaries of top officials. But Grant-Dawson said recent cuts have already relied heavily on shrinking the administration, making deeper reductions to non-student services difficult.

If the board accepts a proposed reduction in its number of cleaning staff, Grant-Dawson said the district will ask school sites to utilize fewer classrooms and buildings on their campuses. Likewise, laying off employees in the budget office means school sites will have less flexibility in how they spend their site-specific funding, since there won’t be a district staff member to help implement those changes in the larger budget.

“We’re going to be able to do less,” Grant-Dawson said.

A slim, four-member board majority led by Brouhard passed the resolution calling for the reduction plans last month, after hours of circling debate over how to address OUSD’s dire budget situation, while maintaining student and school resources.

The same contingent, which is backed by the teachers’ union, has pushed through a number of controversial proposals since January, including amendments to last year’s budget reduction plan that unintentionally cut after-school programs and had to be reversed and a shocking deal to part with longtime Superintendent Kyla Johnson-Trammell before the end of her contract.

Throughout the year, the board’s already tense relationship with district staff, and each other, has grown increasingly tenuous.

In the spring, Grant-Dawson said she warned the board that their budget-balancing amendments could have unintended consequences, like the after-school program funding snafu, before it passed.

“When we did do that, it was like, ‘The staff is trying to keep us from [doing what we want],’” Grant-Dawson said.

Having to present the plan that made the cuts, then later reverse them, created more work for her team. So has developing budget-balancing plans year after year at the board’s direction, then watching as many go unimplemented.

“OUSD’s history reveals an undeniable pattern: requesting plans, then disregarding them; rejecting staff recommendations; changing direction and directions, and, when difficult decisions are finally made, rescinding them shortly thereafter,” Alameda County Superintendent Alysse Castro said in a letter to OUSD last month.

She told KQED that balancing the budget under the current circumstances “is absolutely 100% possible, but it would require a really significant change of pattern and action.”

“Our business team has been alerting the Board and the community about these oncoming financial challenges for several years,” Interim Superintendent Denise Saddler, who took over this summer while the district searches for a new permanent leader, wrote in a letter to families earlier this month. “We could see the need to take measures to mitigate the financial drop off on the horizon, and we have made clear the need to make hard choices long before now.”

Saddler said it would be impossible to make the massive budget reduction — which equals about 20% of the district’s unrestricted funding — without impacting students.

“People we know and care about will lose their jobs. Programs our students love will be reduced or eliminated. Services our families depend on will change,” she wrote.

Not all of the staff reductions in either budget scenario would necessarily come through layoffs. The district plans to offer employees who are over the age of 55 and have served in OUSD for at least five years an early retirement buy-out in June, and the school board directed the superintendent to implement a hiring freeze last month.

The board is supposed to vote on its budget cut plan next month.

Grant-Dawson said prior to Wednesday’s meeting, she hadn’t discussed the partial proposals with board members.

“We’re not in that place,” she said. “They haven’t reached out. They don’t reach out like that.”