Sacramento teachers union and school district unlock $98 million – Is it enough?
Special Projects/Investigations Manager
The Sacramento City Teachers Association (SCTA) announced it has reached an agreement with the Sacramento City Unified School District to unlock nearly $98 million in funds, aiming to address the district’s financial crisis and avoid a state takeover.
The district has been facing a severe financial shortfall, raising concerns about its ability to pay teachers or avoid state intervention.
What’s included in the plan?
According to the SCTA, the agreement includes a plan to use $67 million from a special reserve fund over three years, which is typically allocated for retiree health benefits. The SCTA President said there is sufficient money in the fund to cover the actual costs, and the fund will continue to accrue, alleviating concerns about future financial strain.
The plan also includes saving $22 million in Medi-Cal revenue and $6 million from unfilled vacancies.
However, the union president emphasized the need for more accurate financial data to fully understand the district’s budget situation.
“Well, the past [Chief Business Officer] and this fiscal adviser that [the Sacramento County Office of Education] has had in our district have done a terrible job in accounting for our district’s money and giving real numbers to the decision makers, our school board. So we really need those numbers to be cleaned up and to get a handle on those things before we can really say exactly where our budget is,” SCTA president Nikki Davis Milevsky said.
Davis Milevsky said she didn’t feel like enough solutions were offered to the Board before this.
“I just think it’s pretty amazing to have come to this agreement and to find this kind of savings when we had this fiscal advisor in our district and we had supposedly help from outside experts and yet no one really came up with a good plan to resolve the problems that are happening here,” she said.
Is it enough?
The Fiscal Crisis and Management Assistance Team (FCMAT), an independent state agency reviewing the district’s finances, expressed concerns about the plan’s long-term viability.
“It just potentially kicks the can down the road a month or two months or what have you. It doesn’t actually provide a solution. So I applaud them for sitting down and working through what they think they can do. But I wouldn’t describe this as writing home with a great victory,” said Mike Fine, CEO of FCMAT.
Fine said the latest estimate from FCMAT shows the district being short $135 million by June. That doesn’t account for the new funding, but he says even with the new funding, it doesn’t bridge the gap.
What could happen next?
According to the SCTA, their new plan provides a “clear pathway to avoid insolvency.” It also extends the union’s contract through June 2030, while allowing them to bargain for salary increases.
“It took teachers and a school board and new superintendent to come up with a plan that will help our district’s financial situation and yet keep the supports for our students that we’ve worked so hard to create,” said Davis Milevsky.
The SCUSD Board has been firmly opposed to state receivership, which would transfer control of financial decisions to the state.
If the district were to request state assistance, it would take about 90 days to secure funding. Due to the legislative calendar, Fine said the district would need to make the request next week (early August) or wait until January.
We asked Fine whether it’s common for districts in this financial situation to continue to try to avoid receivership.
“Sacramento City, in just really simple terms, they waited too late, too long, and ran the deficit up too great. They should have taken action five years ago, six years ago, and some action probably should have been taken generations ago, to be honest with you. But … the number is too large and they’ve waited till the eleventh hour. And we don’t generally have districts that do that.”
Fine said the goal is to protect the district’s instructional programs so that whatever happens, school can continue each day as scheduled.
An emergency budget meeting is scheduled later this week to provide further updates on the district’s financial situation.
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