Since then, district staff have repeatedly told the board it must dramatically reduce spending, only for the board to reject or amend plans to do so, preventing the district from moving toward financial sustainability.
“The district is currently … spending $4 million more every month than it’s receiving in revenues,” the district’s chief business officer, Lisa Grant-Dawson, wrote in a letter to families in September. “The more we do that moving forward, the more we diminish our reserves, until eventually, we run out of money.”
For the 2025-2026 school year, OUSD has enough money to cover operating expenses and maintain a required reserve equal to 3% of its annual spending for unexpected costs, thanks in part to reserves built during COVID-19.
Districts across California saw their general fund, which is used to pay for the majority of expenses, grow during the pandemic because of state relief money. While many have also seen those balances fall, OUSD’s decline has been far steeper.
Oakland’s general fund went from a negative balance in 2019 to more than $62 million in 2023. Two years later, it sits at just $3.4 million.
To remain solvent next year, the district must find about $100 million in ongoing spending reductions.
In October, the board directed staff to provide two budget scenarios to make those cuts, but Castro said a laundry list of parameters included in the board resolution might make it an impossible task.
“One of the challenges of this new resolution is that it really does go in a dramatically different direction and places some very firm constraints on some strategies,” she told KQED. “While the staff is working to come up with scenarios that meet those conditions, it’s really an open question whether they will be able to.”
The board’s directions bar any school closures or mergers and instruct staff to make cuts that “do not directly impact students in schools.”
