The Oakland Unified School District appears to be making progress on its effort to close a massive $100 million budget deficit and thereby retain local control over its finances, according to a message from the superintendent.

Following a Board of Education meeting Tuesday, Superintendent Denise Saddler said the “outlook for the 2026-27 budget, while still a major challenge, is now significantly improved” even from one month ago.

In December, the board voted for a budget adjustment that included $100 million in cuts and, with guidance from a team of outside financial experts, the administration has since found even more savings, which means the deficit is projected to be about $50 million, Saddler said in a news release.

“I believe that with these changes, and with the work we will put in to solve the remaining deficit we will keep the district where it needs to be, with local control firmly here in Oakland,” Saddler said.

Over the winter break, the district instituted a temporary spending freeze, reevaluated school site and central office budgets, and reduced this spring’s unencumbered funds by 10% for schools and 20% for administrative departments, according to OUSD officials.

Unencumbered funds are made up of money that has not yet been committed to anything specific.

The spending freeze and unencumbered funds reductions allowed the district to maintain the state-mandated 2% reserve by the end of the fiscal year in June.

Last June, the district dug itself out of state receivership after more than 20 years.

State leaders took the reins in 2003 when OUSD descended into fiscal insolvency and needed an emergency $100 million loan from the state, which then appointed administrators to run the district instead of school board-appointed superintendents.

In 2009, the district was allowed to appoint superintendents but remained under state fiscal oversight until the final payments on the loan were made last year.

The district still needs to resolve the remaining $50 million deficit for next fiscal year, which Saddler she and her financial team are currently working on. 

“I am confident that we will be able to make the necessary changes, although they will not be easy,” she said.