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The Serna Center \u2013 headquarters of the Sacramento City Unified School District \u2013 on Thursday, Feb. 5, 2026.<\/p>\n
JOS\u00c9 LUIS VILLEGAS<\/p>\n
jvillegas@sacbee.com<\/p>\n
The clock is ticking on Sacramento City Unified School District\u2019s revised budget, as its fiscal overseer, the county education office, must decide by Monday whether to approve or reject it. But the two sides have yet to bridge their differences over the budget.<\/p>\n
Now, the district is preparing to seek state help reviewing its budget if the revised budget gets rejected.<\/p>\n
The looming budget decision comes amid SCUSD\u2019s yearlong fiscal crisis, with the district and Sacramento County Office of Education still at odds over how to address its $222 million structural deficit.<\/p>\n
By Monday, the Sacramento County Office of Education must decide whether the district\u2019s budget revisions address its current and future financial obligations. SCOE has already signaled concerns about them, warning that the revised budget relies on uncertain revenue and solutions outside the district\u2019s control.<\/p>\n
The district faces three possible outcomes. If SCOE approves the revised budget, the district avoids a Budget Review Committee, which would bring added scrutiny.<\/p>\n
If SCOE disapproves it, the budget goes to a BRC. The committee would have three fiscal experts selected by the district board from a list provided by the state superintendent, and it would review the budget and could recommend changes.<\/p>\n
A third option, if SCOE disapproves the budget, is for the district and county office to agree to waive the BRC process. In that case, SCOE would take on the review committee\u2019s role, while the state would ensure a balanced budget is adopted by Dec. 31.<\/p>\n
The district has faced county budget disapprovals before. SCOE disapproved SCUSD\u2019s budgets three years in a row, from fall 2018 through summer 2021, but the district received a waiver from the BRC process each time, according to the district chief business officer Gerardo Castillo.<\/p>\n
Several board members, including Jasjit Singh and Taylor Kayata, voiced frustration with the county office and signaled support for a BRC review if the county office rejects the budget again. Singh said the district has received \u201ca slap on the hand\u201d from the county office instead of the support and partnership it has sought in addressing the financial distress.<\/p>\n
\u201cIf we don\u2019t have the partnerships here, we\u2019ll go seeking the partnerships elsewhere,\u201d Singh added.<\/p>\n
Kayata said the district\u2019s efforts to seek guidance were met with little support, and that the county office seemed focused on a state loan rather than considering other options.<\/p>\n
\u201cAnd they don\u2019t accept the idea that we don\u2019t want to do that,\u201d Kayatta said.<\/p>\n
The board made no budget decisions Thursday as the item was informational, and board president Tara Jeane said trustees would revisit next steps at a meeting later this month.<\/p>\n
The dispute over future revenue<\/p>\n
On Sept. 17, the Sac City Unified board approved the revised 2026-27 budget projecting to improve the district\u2019s financial position by $208.3 million, days after the county office rejected the original budget the board had approved in June.<\/p>\n
The disagreement between the two agencies centers on the district\u2019s projections for future revenue. The state-funded Fiscal Crisis and Management Assistance Team revised its estimate of when SCUSD could run out of cash, moving it from January or February to April or early May, while former FCMAT CEO Michael Fine said the district could make it through the fiscal year.<\/p>\n
But SCOE\u2019s concern is that the district lacks a long-term plan to address its structural deficit. The revised budget counted two one-time revenue sources as ongoing funding, a practice financial experts criticized for not being a standard budget practice.<\/p>\n
\u201cOnce again, budget solutions must be feasible. Speculative budget solutions will not support the district\u2019s cash position and ability to make payroll,\u201d wrote Luz Cazares, SCOE\u2019s appointed fiscal advisor, in a letter to the district superintendent Cancy McArn on Sept. 23.<\/p>\n
State Superintendent Tony Thurmond, who had warned SCOE he could take over its oversight of SCUSD if he found the county office ineffective in addressing the district\u2019s fiscal crisis, echoed SCOE\u2019s concerns when it came to the budget assumptions.<\/p>\n
\u201cSuperintendent Thurmond has been consistent and clear on the following: One, one-time funding is not guaranteed in subsequent years and should not be relied upon to balance an ongoing budget,\u201d Julie Lautsch, a spokesperson for the California Department of Education, said in October.<\/p>\n
\u201cTwo, that sound fiscal planning requires contingency plans in case anticipated one-time funding doesn\u2019t materialize. And three, that his priority remains ensuring that Sac City has a credible path to long-term solvency.\u201d<\/p>\n
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