The District presented its 1st interim report to give an important update on the District’s current financial status and outlook for the years ahead. The good news is that despite some notable changes in revenue and expenditures, this year’s budget is generally balanced. The bad news is that more budget cuts are on the horizon, with an estimated $26.5M in reductions in the next two years. To ensure the Oakland community is prepared to engage in the difficult decisions ahead, GO has published an overview of historical and current state and local budgetary challenges and considerations on how to move forward.
Digging Deeper into the First Interim Report:
Despite the balanced budget, there were several major changes:
- Increased Funding: An increase in revenue given that the District is able to use last year’s enrollment and attendance numbers regardless of any changes this year due to the pandemic
- Increased Salary Costs: An increase in employee salary costs from previously negotiated labor union agreements
- COVID Funds: Coronavirus Relief Funds allocation & spending
The current balanced budget is a testament to the progress OUSD is making to build the financial stability that Oakland students deserve. In past years, the District was forced to make painful mid-year budget cuts, freezing school site-budgets, taking back money from school sites, and making major cuts to central office (which included central services like Restorative Justice). Since 2018, the District strengthened its rainy day fund (“reserve”) and has not had to make any mid-year cuts. Stable leadership is key to that progress with Superintendent Johnson-Trammell’s continued tenure and the hiring of Lisa Grant-Dawson as a permanent Chief Business Officer to help the District stay the course.
Despite this progress, we are not in the clear. The budget problems for OUSD are structural and statewide, driven by rising costs of teacher pensions, special education services, and maintaining school buildings with declining enrollment and relatively flat funding. In fact, the recent failure of Proposition 15 in this past election, which would have generated $25M dollars per year for Oakland schools, coupled with the COVID crisis and the anticipated recession, has deepened the long-term financial challenges of the District.
OUSD Board Vice President Shanthi Gonzales recently affirmed her commitment to financial stability, “I refuse to be a part of a Board that gets taken over by the state. We need to continue to expand our means, but we must live within our means.” As four new board members are sworn in in January, engaging the community in sustainable solutions for the budget must be a top priority. If the adults don’t get this right, Oakland’s students will feel the consequences.