The Abridged version:<\/p>\n
Sacramento City Unified School District has faced financial uncertainty for nearly the entire school year, but leaders received their most drastic warning yet last week. Advisers with a statewide crisis team recommended the board consider asking the state to take over the district as early as summer.<\/p>\n
So far, trustees have rejected that advice, saying they are not ready to go down a path many agree is a worst-case scenario.<\/p>\n
State receivership occurs when a district runs out of money and options and requests an emergency loan from the Legislature. The process can often take years and come with heavy budget cuts and new debt.<\/p>\n
Sacramento City Unified School District officials received a bleak review of their finances last week, including recommendations they consider turning to the state for assistance.<\/p>\n
So far, leaders have rejected the advice.<\/p>\n
\u201cI don\u2019t think we have gotten to the point where it is necessary,\u201d Trustee Taylor Kayatta said during last Thursday\u2019s school board meeting.<\/p>\n
At the meeting, advisers from the Fiscal Crisis and Management Assistance Team, a state-funded organization of school finance experts, presented their review of Sacramento City Unified\u2019s situation. Their projections showed the district running out of cash and options by the start of 2027.<\/p>\n
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Michael Fine, the organization\u2019s CEO, urged the board to consider state aid sooner than later. <\/p>\n
The ongoing crisis \u201cinvokes a range of emotions among parents, students, employees and the community \u2014 most notably, grief,\u201d Fine\u2019s presentation stated. \u201cWe must all lead with this in mind.\u201d<\/p>\n
Jump to:<\/p>\n
What is a state \u2018takeover\u2019?<\/a><\/p>\n How many districts have gone through this?<\/a><\/p>\n Whom can parents contact during receivership?<\/a><\/p>\n Why is receivership seen as worst-case scenario?<\/a><\/p>\n What are the impacts to students and families?<\/a><\/p>\n What\u2019s the likelihood of a state \u201ctakeover\u201d soon?<\/a><\/p>\n Why is this coming up now?<\/a><\/p>\n What happens if the district runs out of cash?<\/a><\/p>\n Could the governor help in the state budget?<\/a><\/p>\n What is a state \u2018takeover\u2019?<\/p>\n When a school district in California runs out of money and generally has exhausted all other alternatives, trustees can ask the state for an emergency loan.<\/p>\n The funds need the Legislature\u2019s approval and governor\u2019s signature. Once approved, a county-appointed administrator will take charge of the district. This external, de facto leader remains in place as long as it takes the district to pay back the emergency money, with interest.<\/p>\n This scenario is known as going into state receivership or commonly referred to as a \u201cstate takeover.\u201d<\/p>\n How many districts have gone through this?<\/p>\n Out of about 1,000 school districts in California, 10 have had to take out emergency loans since 1990. The most recent was Plumas Unified School District, which went into receivership last year.<\/p>\n The process isn\u2019t usually a short one \u2014 the average length of receivership is roughly 14 years, or as long as a student\u2019s entire TK-12 experience. <\/p>\n When the outside administrator arrives, elected school board members become advisers without authority. Superintendent Cancy McArn, who just earned her official position at the end of April, would lose her job.<\/p>\n Parents with concerns can still contact the trustee who represents their area. But these officials no longer have decision-making power.<\/p>\n Why is receivership seen as worst-case scenario?<\/p>\n Board members and their critics alike have referred to the situation as the worst outcome, particularly because of the loss of local control.<\/p>\n Kayatta, a trustee since 2022, said that in a previous role with the state controller\u2019s office, he worked directly with a district under receivership. There, he witnessed firsthand a break in communication between the district and families.<\/p>\n \u201cIt is actively terrible for the community when the state takes over,\u201d Kayatta said in an interview with Abridged last month. \u201cIt is a Band-Aid, it\u2019s declining enrollment, it\u2019s a lack of community involvement in the decisions. People stop feeling like they have a connection to their schools.\u201d<\/p>\n What are the impacts to students and families?<\/p>\n Receivership often means deep budget cuts, with more of a hammer than chisel approach, experts say.<\/p>\n \u201cWhen the state provides an emergency loan to a district that is fiscally insolvent, the priority is repaying that loan,\u201d said Jason Willis, professor at the University of the Pacific in Stockton and an expert in education finance.<\/p>\n Plumas Unified, in its first school year under receivership, is contending with impending layoffs of teachers and librarians, plus proposed cuts to school bus transportation, The Plumas Sun reported<\/a>.<\/p>\n Oakland Unified School District spent 22 years in receivership. Since coming out on the other side, the district has continued to face fiscal instability.<\/a><\/p>\n What\u2019s the likelihood of a state \u2018takeover\u2019 soon?<\/p>\n The school board was adamant Thursday that it is not ready to go down the path of state receivership.<\/p>\n \u201cI am not in favor of doing it unless it is the absolute last step,\u201d Kayatta said at the meeting. \u201cI understand there are timing concerns with getting legislation through if we need to. But I think we need to wait to make the decision as late as possible.\u201d<\/p>\n