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Sacramento City Unified Board President Tara Jeane, center, listens as Mike Fine, CEO of the Fiscal Crisis and Management Assistance Team, reviews the district\u2019s financial situation during a meeting at the Serna Center on Thursday, May 7, 2026. The state entity projects SCUSD will run out of money in February.<\/p>\n
NATHANIEL LEVINE<\/p>\n
nlevine@sacbee.com<\/p>\n
Gov. Gavin Newsom\u2019s revised budget<\/a> could provide Sacramento City Unified with roughly $29 million in ongoing new funding, though it remains uncertain how much the money will alleviate pressure from the district\u2019s unprecedented budget crisis.<\/p>\n The estimate includes about $15 million from an increase to the Local Control Funding Formula and up to $14 million from a proposed increase in special education funding, with roughly $36 million in one-time or restored funding available separately.<\/p>\n The LCFF figure of $15 million reflects the district\u2019s preliminary calculation, while the remaining estimates are still uncertain and will depend on SCUSD\u2019s enrollment, average daily attendance and the final state budget.<\/p>\n Newsom is \u201cunder-appropriating the expenditures,\u201d Leilani Aguinaldo, senior director of School Services of California, said during her presentation, referring to $3.9 billion in Proposition 98 funding that the governor has proposed to withhold from the budget.<\/p>\n District officials are expected to share more detailed estimates during the third interim presentation on June 4.<\/p>\n Board trustee Jasjit Singh criticized the state\u2019s handling of school funding, pointing to both the $3.9 billion Prop. 98 under-appropriation and the roughly $4.6 billion expected to go into the state\u2019s rainy day fund rather than directly to districts. Budget decisions are not being made with students and workers in mind, he said.<\/p>\n It was \u201creally hard to hear in a victory speech from our governor\u201d that billions of dollars may be available on paper but not immediately accessible to districts scrambling to support students and staff,\u201d Singh said.<\/p>\n \u201cWe\u2019re being put in the hot seat to make tough decisions, when in reality we\u2019re woefully underfunded, and we\u2019re having to budget out year after year.\u201d<\/p>\n New funding, familiar constraints<\/p>\n Thursday\u2019s meeting carried a note of optimism over Newsom\u2019s revised budget, but it was repeatedly followed by caveats.<\/p>\n Board President Tara Jeane said the proposed 46% increase in special education funding was good news, but still not enough to cover SCUSD\u2019s costs. Even with the increase, Jeane said, the district would still have to rely heavily on unrestricted dollars to cover the program\u2019s expenses.<\/p>\n She also cautioned that about $36 million in one-time funding should not be seen as a way to reverse cuts, but a way for the district to relieve pressure on its unrestricted funds to remain solvent.<\/p>\n The sentiment was shared by interim chief business and operations officer Lisa Grant-Dawson, as she noted the increases proposed in the revised state budget would largely allow the district to sustain existing services rather than expand programs.<\/p>\n \u201cRight now I want to keep this district solvent. So it\u2019s not about bringing things back, it\u2019s about freeing up unrestricted monies,\u201d Jeane said.<\/p>\n \u201cI look forward to hearing staff\u2019s creativity in looking at how to best maximize the use of these dollars to ensure that our budget is looking stronger and stronger as we go through our challenging stuff.\u201d<\/p>\n The board voted Thursday<\/a> to issue final layoff notices to nearly 100 employees who had challenged the cuts and requested hearings.<\/p>\n Fiscal plan still shows deep gap<\/p>\n Thursday\u2019s meeting also included an updated fiscal solvency plan, which showed SCUSD has identified more than $96 million in savings for 2025-26 as of May 21, bringing its remaining unrestricted deficit to about $75 million. It has exceeded the district\u2019s initial $67.7 million target, Grant-Dawson noted.<\/p>\n The outlook for 2026-27 remains severe, however. Even after the identified savings, the district\u2019s plan showed SCUSD is still projected to spend far more than it brings in next year, with the forecasted gap remaining over $203 million.<\/p>\n Grant-Dawson said the district expects a clearer picture to be shared after officials account for other expenses before the fiscal year closes.<\/p>\n \u201cWhat can you expect when you see the third interim again? Because we are now slowing down spending, we have encumbrances,\u201d Grant-Dawson said.<\/p>\n \u201cMany of the purchase orders have been closed for items that we won\u2019t see \u2014 that means there\u2019s less spending.\u201d<\/p>\n This story was originally published May 22, 2026 at 7:00 AM.<\/p>\n Related Stories from Sacramento Bee<\/p>\n
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