In 2003, the Oakland Unified School District received a $100 million bailout loan because of overspending, outdated budgeting methods, declining enrollment numbers and raises for teachers that were not allocated for. Today, the district still owes about $35 million on that loan, and they continue to miss the mark on millions in cuts they are supposed to make. They need to make another $30 million in cuts by next summer, if they want to receive more aid from the state.
So with that picture painted, here’s why the school district is having so many financial problems. These are only a few:
Too many schools. There are 124 schools (including charter schools) within the Oakland Unified School District. A new one opened just last year. That school, the Oakland School of Language, was specifically created to keep students in the district by offering a Spanish-immersion program. The schools have an average of about 400 students. While the district acknowledged the issue, they also are reportedly concerned that enrollment numbers will drop if schools are consolidated or closed. A report conducted by the Fiscal Crisis & Management Assistance Team (FCMAT), which was created by Assembly Bill 1200 to provide financial advice and other business services statewide on schools, highlighted the financial drain created by having many small schools in a district.
Overstaffing. In addition to a few dozen layoffs last year, there is a proposal to eliminate 53 jobs this year. The FCMAT report said overstaffing was another factor contributing to the district’s’ financial problems. The district noted that staffing levels have not been consistent with the decline in enrollment numbers, and they are supposed to notify schools of how much staffing reduction is necessary by November.
Budgeting methods. The school district used to create their budgets based on the previous year, which by their own admission, was inhibiting their ability to prioritize. For the 2018-19 school year, they have switched to zero-based budgeting, in which they have started at zero and allocated funds based on priorities, not on previous-year budgets.
Charter schools. There are 37 charter schools in Oakland, and as district enrollment numbers decrease, charter enrollment numbers increase. A think tank, In the Public Interest, released a report in May saying charter schools cost the city $57.3 million last year, but some argue that this number is misleading because the school incurs fewer expenses when students move to charter schools.
Here’s what’s being done to try to address the problem:
- AB-1840. Governor Jerry Brown signed Assembly Bill 1840 Education Finance that will cover 75% of Oakland Unified School District’s $30 million deficit, if certain criteria are met
- 2018-2020 Fiscal Vitality Plan. As referenced throughout, the school district created a fiscal vitality draft plan in response to the FCMAT report with solutions that include reducing staff and reworking the budgeting process.
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