The Abridged version:
- The Sacramento City Unified School District stands to gain millions from Gov. Gavin Newsom’s latest budget proposal. That alone will not resolve their multimillion-dollar budget crisis, officials said.
- School board members have approved deep budget cuts and hundreds of anticipated layoffs to avoid state receivership.
- The district’s interim chief business officer said her team continues to look for ways to cut costs and boost revenue. However, a state loan “does seem like it’s inevitable.”
The Sacramento City Unified School District remains in hot water financially, despite some hope that recent gains in the proposed state budget would buoy the cash-strapped district.
Gov. Gavin Newsom included multiple boons for public schools, including a bump in special education funding, in his latest plan for the state budget unveiled earlier this month.
However, he continued to withhold billions in base funding, a decision that education leaders across the state have decried.
Whatever net gains are tucked inside the 2026-27 budget — which will be finalized later this summer — are not enough to singlehandedly pull Sacramento City Unified out of its multimillion-dollar budget crisis, officials say.
What did Newsom add?
The new budget draft, known as the May revision, contained “a lot of good news” for schools, according to Leilani Aguinaldo, director of governmental relations for School Services of California, a consulting firm.
That includes a higher percentage of state funds per student. Some of that extra money is meant to help with a new requirement that districts offer employees up to 14 weeks of paid pregnancy leave.
In all, Sacramento City Unified could receive about $15 million more in general funds, $14 million extra to special education and about $36 million in one-time grant money.
And what’s still withheld?
Newsom at the start of the year had proposed pulling out about $5.6 billion from public education funding, with a promise to pay out that sum next year. In May, he whittled that withholding down to $3.9 billion.
For Sacramento City Unified that translates to a shortchange of roughly $20.9 million.
Budget cuts still needed
Added revenue from the state definitely helps the Sacramento school district, said interim Chief Business Officer Lisa Grant-Dawson.
But leaders cannot afford to backtrack on the heavy cuts and staff reductions already made, she cautioned.
“It would not behoove us (to say), ‘We got new money, let’s bring people back,'” Grant-Dawson said.
Board President Tara Jeane echoed those reservations.
“I don’t look at this and go, ‘Great, we can pull cuts back,'” Jeane said of the governor’s plan.
Rather, she said the new funds “can help relieve the pressure” on the district’s budget.
More still needed
The extra funding alone will not keep Sacramento City Unified out of state receivership.
“No way,” Grant-Dawson told Abridged.
Trustees have made it clear: Taking a loan from the state is an absolute last resort. Grant-Dawson said her team is working diligently to find alternatives, at the board’s direction.
“It does seem like it’s inevitable,” she said of receivership. “But we’re still working.”
‘The district can survive this’
Grant-Dawson came to Sacramento City Unified on a six-month contract at the start of the year. Previously, she was the top budget official for Oakland Unified, helping guide that school district out of 22 years of state control.
Receivership is often referred to as a worst-case scenario involving the loss of local authority and years of loan repayments, facilitated by difficult budget cuts.
“Don’t get me wrong — it is a heavy yoke,” Grant-Dawson said. But, she said, it may not be quite as frightening as it seems.
In her previous roles, Grant-Dawson said she has witnessed state administrators work cooperatively with board members to make careful changes.
“The district can survive this,” she said. “Sac City, however it lands, will be fine.”
Savannah Kuchar is a reporter covering education. She came to Sacramento to be a part of the Abridged team and contribute to a crucial local news source.