Sacramento City school budget outlook even worse than thought

The Abridged version:

• Sacramento City Unified was expected to have an $86.7 million deficit after next school year. The situation is worse than originally thought.
• When evaluating costs for the next two years, district staff used an incorrect figure that underbudgeted about $32 million worth of employee benefit expenses.
• The error was one of multiple issues found with the district’s rightsizing plan. Board members and union leaders complained about a lack of progress as the deadline to avoid insolvency nears.

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In December, Sacramento City Unified School District was on track to be $86.7 million in the red after next school year.

The situation is actually far worse.

That’s according to a presentation the district’s new interim chief business officer, Lisa Grant-Dawson, delivered at a special board meeting Thursday night.

Since September, the district has been grappling with a multi-million-dollar budget crisis after uncovering a $45 million shortfall from last year. Sacramento City Unified could be out of cash as soon as this summer, according to both staff and external evaluations.

In response, trustees approved a slew of budget cuts in November. Implementation has been frustratingly slow, according to some board members, anxious for an update on any improvements.

Grant-Dawson started her role in January. In her first presentation to the board earlier this month, she noted multiple potential deficiencies with the district’s current rightsizing plan.

$32 million unaccounted for

Among the savings measures the district has employed so far was a one-time adjustment that allowed about $32 million in savings on employee health benefits for this fiscal year.

What would have been about a $140 million dollar expenditure shrunk to just over $108 million.

However, according to Grant-Dawson’s presentation, staff incorrectly used that $108 million figure when projecting costs for the next two school years, when they should have used $140 million.

That missing $32 million needs to be accounted for looking at the district’s future deficits — “otherwise, they are understated,” the slides read.

Sacramento City Unified could be short closer to $138.7 million in summer 2027, according to preliminary estimates in Grant-Dawson’s presentation.

One of multiple issues

Even beyond the $32 million error, Grant-Dawson said there were multiple holes in the plan.

Some of the cost-saving cuts previously outlined may be difficult to implement, she told the board. Others may not have the anticipated immediate impact.

For instance, trustees approved delaying payment for new math curriculum. However, that purchase was not included in the 2025-26 budget in the first place.

“Ultimately, we’re going to have to add more things to the plan,” Grant-Dawson said. She did not specify what additional cuts could be around the corner. Grant-Dawson will be back before the board next Thursday expected to have further updates.

Trustee tries to take action

School board members at Thursday’s meeting expressed growing impatience.

A flashpoint in this week’s meeting came when trustee Taylor Kayatta proposed making a handful of more drastic cuts. These included immediate terminations, further cuts for supplies, and increasing staff furlough days from three to 12 this spring.

Fellow board members largely agreed with Kayatta’s sense of urgency. Board President Tara Jeane, a teacher, said she was caught between a rock and a hard place.

“I’m really torn,” Jeane said. “We’re looking for a solution. And I’m not sure I’m convinced that everything you’ve put here is the solution,” she said, addressing Kayatta.

The decision was ultimately punted to next week.

Impending deadline stokes tensions

The clock is ticking for Sacramento City Unified to course correct.

“As a board we gave direction,” Trustee Michael Benjamin said. “My concern is we have some very hard timelines.”

That includes most immediately Saturday, the deadline for the district to give the Sacramento County Office of Education a mandatory update.

Nikki Milevsky, president of the Sacramento City Teachers Association, also criticized staff for the lack of progress.

“There is no other way to describe tonight’s presentation as anything other than a total mess,” she said.

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.