Oakland school district will offer buyouts to senior employees

Oakland Unified School District hopes to get scores of staff to resign at the end of the school year as a cost-saving measure, part of a package to cut $100 million from next year’s budget.

On Wednesday, the board approved an early retirement incentive plan to encourage staff older than 55 who have worked for OUSD for at least five years to resign by June 30, 2026. The district will offer  75% of an employee’s final salary toward a tax-sheltered annuity over a five-year period. It’s the first time the district has offered the plan in 15 years.

Five school board directors supported the plan, while Mike Hutchinson, who represents District 4, voted against it. Clifford Thompson, who represents District 7, was absent.

“We haven’t addressed our real financial crisis,” Hutchinson said during the Nov. 12 school board meeting. “Instead we’re doing things like hiring freezes and trying to incentivize losing our most experienced staff.”

The savings would be realized by replacing senior employees who have higher salaries with lower level employees with lower salaries, or by not replacing those positions at all, said Dennis Yu, an executive with Public Agency Retirement Services, an organization that helps public institutions save money through alternative retirement plans. 

In total, 1,066 OUSD employees would be eligible for the plan, with an average salary of $82,149. If a quarter of those staff take the early retirement option, the district could save millions of dollars, depending on how many roles are replaced. If 80% are replaced, the district could save $5.6 million in the first year, and $22.6 million over five years, according to Public Agency Retirement Services projections. 

Eligible employees must submit their irreversible resignation by Jan. 29. Although the board adopted the plan, if it doesn’t help meet the district’s financial goals, it could be rescinded. 

“We’d conduct a fiscal analysis to determine whether or not there would be enough savings as a result of those retirements to justify this program,” Yu told the board. “So the board has the ability to see how many folks take advantage and what the savings would be before you decide whether or not you want to move forward.”

After receiving those calculations, the board will decide in February whether it makes financial sense to implement the early retirement plan. 

$100 million in cuts ahead

Next Wednesday, Nov. 19, district staff are expected to present budget scenarios for the board to consider that would each allow OUSD to trim at least $100 million, or about 10%, from the district’s 2026-2027 budget. In a harsh letter to district leadership on Nov. 1, county superintendent Alysse Castro begrudgingly approved the budget plan the board put together last month.

“At its October meeting, the board continued a troubling — and troublingly familiar — pattern of deferring difficult decisions,” Castro wrote. “Rather than adopting a concrete, time-bound plan to address significant budget shortfalls, the board approved what can best be described as a plan to have a plan.”

Board president Jennifer Brouhard pushed back against that language in remarks Wednesday night.

“The board approved a resolution directing district leadership to develop budget scenarios using parameters that reflected our shared vision and priorities — not a plan to make a plan, but a framework to guide real decisions,” Brouhard said. “The hard budget decisions ahead are the cumulative results of choices made by previous boards and district leaders over decades, but they are up to us to resolve.”

The resolution the board approved on Oct. 8 asks staff to present budget options that each result in at least $100 million in reductions for the 2026-2027 budget but do not involve closing or merging schools and limit cuts to school sites. The board directed staff to rely heavily on restructuring the district’s central office, consolidating departments, cutting contract spending, and increasing enrollment and attendance, which increases revenues. 

Castro argued that with all of these restrictions on what can be cut, “it is unclear whether it is even possible to develop scenarios that both satisfy these constraints and achieve the nearly $100 million in necessary cost reductions.”

OUSD has also been in contract negotiations with two of its unions — the Oakland Education Association, which represents teachers, and the Service Employees International Union 1021, which represents support staff, for the last eight months. Castro wrote that the district will not be able to offer any compensation increases without corresponding cuts. 

As part of the budget solution, the district implemented a hiring freeze in October that is projected to save the district $5.8 million next year. The district’s cash reserves have continued to dwindle this year. When the board adopted the 2025-2026 budget in June, the end-year balance in the unrestricted fund was projected to be at about $26.7 million. Forty-five days into the fiscal year, the balance was projected to be $16.7 million. By the end of October, the fund balance at the end of the year was projected to be $1.3 million, well below the districts’ self-imposed requirement to have reserves totalling at least 3% of the total annual budget, or around $27 million. 

The board will vote on the budget scenarios on Dec. 10.

“I pray that in the process of further cuts, not too much harm will be caused,” said Sheila Haynes, a parent on OUSD’s Community Advisory Committee for Special Education. “Please look at outside contracts and consulting. And please cut as much as possible in a way that won’t cause further harm.”

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