Sac schools reveal their red ink just after teachers get another raise | Opinion
The region’s recurring financial nightmare, the Sacramento City Unified School District, has until Wednesday to provide a draft plan on how it intends to avoid running out of money some time next year. But the district’s teachers have little to fear.
In September, mere days before the district revealed to the public that its main spending account was heading toward the red to the tune of $19 million, the board unanimously approved two years worth of raises for the teachers.
Those raises amount to nearly half the short-term financial problem that the district now must somehow solve.
Officially, a first draft of the district’s “fiscal solvency plan” calls to “reduce future year salary and benefits costs.” The words, given the circumstances, ring pretty hollow. Yet in practice, the district for years has done precisely the opposite. A stunning 94% of the district’s discretionary funds are spent on salaries and benefits. It is a function of a school board from top to bottom that is too beholden to unions that underwrite their political careers.
Listening to the wishes of school employees is one thing. Paying them salaries and benefits to the brink of insolvency is entirely another. That is what makes Sacramento City Unified so special.
There is an “immediate urgency to identify and implement significant budget solutions,” David Gordon, Sacramento County Superintendent of Schools, wrote to SCUSD on Nov. 5.
Gordon, once again, looms large over SCUSD’s future ability to govern itself. Insolvency can lead to the state appointing its own district leadership and stripping the board of its authority to make the necessary painful decisions to bring SCUSD’s fiscal house in order. In fact, the district’s loss of control over itself has already begun.
Whether SCUSD can find ways to cut costs in the coming months will determine who runs this district. Yet watchdogs like Gordon have seen this before.
A budget blown, again
The basic drivers of today’s problem are a carbon copy of what happened with SCUSD just six years ago. Then, an unbudgeted bump in spending sent one of our region’s larger school districts perilously close to a fiscal cliff. This time, just before the district chose to bring to reveal the extent of its financial mismanagement in September, the teachers got their raises.
The district on Sept. 4 calculated that the 2% salary bump would require nearly $8 million for this fiscal year and more than $22 million overall in the following year. How would the district absorb these costs? “The ongoing costs in 2026-27 will be supported by strategic financial planning…” the staff report told the board.
Then just 14 days later, the public got to know that the district was officially in trouble because of massive overspending that happened the previous fiscal year. Those “unaudited actuals” in the Sept. 18 report showed $847 million in projected total expenses compared to an approved budget of $760 million.
A school district doesn’t just begin to discover this kind of overspending months after a budget year closes. Instead, a blown budget is akin to a slow-moving train wreck, as the real expenses roll up over time. Hopefully watchdogs like Gordon will do some digging. District voters in particular deserve to know if management and board leaders knew it was approaching budget problems when they tentatively agreed to these raises in June and formally approved them in September.
SCUSD’s biggest pot of money to teach its children, its unrestricted fund, is projected to go negative by June to the tune of $19.1 million, Superintendent Gordon wrote to the district on Oct. 10. Remember, this is the funding source where those $8 million in teacher raises for this fiscal year are coming from.
The district begins to lose control
Complicating matters short-term is how SCUSD’s chief business officer, Janea Marking, is leaving to a Bay Area school district. Without a permanent replacement, Gordon has invoked a section of the state education code and begun to strip SCUSD of budgeting control.
The lack of a top finance officer is a “significant fiscal event and will have an immediate severe fiscal impact.” Gordon’s office now has the power to “stay or rescind any action that is determined to be inconsistent with the ability of the school district to meet its obligations for the current or subsequent fiscal year.”
Those teacher raises, however, appear to be off limits. Gordon has requested the district’s draft get-out-of-insolvency strategy by Wednesday.
This is another wake-up call for the city of Sacramento, its parents, voters and businesses.
The quality of any city is no better than the quality of its schools. This is why the cycle of financial troubles at SCUSD has long held back Sacramento’s true potential. And now, because Sacramento has yet to learn lessons from its own history, SCUSD’s overspending on itself threatens the ability of the city to educate its children. More to come.