OUSD May Receive Millions in State Aid – But the Money Comes with Strings


Parents and teachers protest last school year against cuts to programs and layoffs at school sites. Photo by Ken Epstein.

The State of California is set to approve a law that would relieve the Oakland Unified School District’s ongoing financial distress, but the grant comes with strings—which in the worst case could mean the state and its affiliated agencies could require OUSD to close dozens of schools, sell or lease surplus property and lay off hundreds of teachers, nurses, cafeteria workers and custodians.

The trailer bill (AB-1840 Education Finance) has already passed the State Legislature and is now awaiting Gov. Jerry Brown’s signature. Brown, who was reportedly involved in crafting the legislation, is said to be likely to sign the bill.

Under terms of the bill, Oakland and Inglewood (which is in the same boat as Oakland) would receive aid from the state through 2022, (a total for Oakland of about $34.7 million), which would pay 75 percent of the district’s projected operating deficit in 2019-20, up to 50 percent of the projected operating deficit in 2020-21 and as much as 25 percent of the operating deficit the following year.

The bill also includes mandated “benchmarks,” which the district must meet in order to receive the state grant.

“OUSD will be required to partner more closely with county and state officials, adopt multi-year financial projections that would eliminate its deficit, and produce a plan to right size the district,” by closing or consolidating schools, according to the district’s explanation of the bill.

“We appreciate the partnership with (the agencies) and our legislative delegates for working with us to address our pressing financial situation. We know the benchmarks outlining accountability and sound fiscal practices will help guide us as we continue building a solid and sustainable foundation for the district using the policies set forth by our own Board of Education,” said Superintendent Kyla Johnson-Trammell.

“We must act with urgency,” she said, speaking at a recent district committee meeting. “We’ve simply run out of time.”

Many Oakland educators and parents are encouraged by the prospect of financial relief to the public schools. But many expressed concern about the agenda of the agencies that would have the final say-so about whether the annual cuts the district is proposing meet official mandates.

These agencies, the Alameda County Office of Education and the Fiscal Crisis and Management Assistance Team (FCMAT), a state-funded nonprofit that advises districts on financial matters, have a long record in Oakland of advocating austerity, school closings and layoffs.

Both agencies played a large role in pushing OUSD into receivership (2003-2009) and forcing the district to take a $100 million state loan, which it did not ask for and had no control over spending.

Despite their influence over district policy for the six years of state receivership, neither agency has taken any responsibility for saddling OUSD with debt, their failure to balance the district’s budget or to institutionalize adequate financial controls.

“The state support provides relief in the near term, giving us the opportunity to implement longer term strategies to create a sustainable, quality school district for years to come,” said district spokeswoman Valerie Goode, quoted in EdSource. “The truth is, even with this support, we will need to continue making hard decisions to reduce our budget, right-size the district and continue improving our financial practices.”

According to district sources, OUSD must cut $30 million by June of 2019, which includes $20 million to eliminate a structural deficit and $10 million in reserves. It is still unclear how the district will pay raises for teachers, who have been working for a year without a contract.

Because the state grant would be one-time money, it would not eliminate the district’s structural deficit. But the grant would allow OUSD to slow down the cuts, spreading them over a several-year period, said School Board President Aimee Eng.

Oakland has its own financial problems, said Eng, but like other districts throughout the state, such as Los Angeles and Sacramento, “We’re in a place with flat revenue and dramatically increasing expenditures.”

The Alameda County Office of Education recently rejected OUSD’s three-year budget plan, saying it did not adequately address needed budget reductions. The school board has created a special committee to recommend the $30 million in budget cuts to avoid future deficits.

In a letter to community supporters of public education, Oakland Education Association President Keith Brown was positive about the state grant and told the community that the bill had broad support in the legislature and was unstoppable. “We will have opportunities later to weigh in on the requirements,” if the agencies push the district to consolidate schools or sell surplus property, he said.

One parent who has been following the progress of the state bill closely is Nilofer Ahsan, a member of Equity Allies for OUSD, an all-volunteer organization of Oakland parents and community members.

“There is a multi-million-dollar question facing all of Oakland,” she said. “It is true the district is in fiscal crisis and needs to fix those issues. But the question is: How are we going to be sure the changes are going to be good for students and families in the long run?”

“What will FCMAT and the County Office consider to be an adequate plan?” Ahsan asked. “The fear is that these (requirements) will be tied to deep austerity measures: School closures and losing school staff.”
“There’s no denying tough decisions will need to be made. As a community, we’re going to feel every single cut.”

Realistically, not all of the cuts can come from central office staff, she said “The cuts will be felt at the schools.”

Parent activist Anne Swinburn has also been closely following the state bill.

OUSD is in financial distress “for a bunch of reasons,” including many that are at least partly the responsibility of the state and the Legislature: state receivership and the expansion of charter schools to almost one-third of schools and students in Oakland.

“The district clearly needs financial relief. It’s important that we remember the situation we are in  is because of actions that happened at the state level, not just locally.”

“We really need for the state loan (a $40 million debt still outstanding) to be cancelled, and we need the Legislature to change the charter laws, so Oakland can decide locally what schools are opened and where they are located.”

“This bill gives the county superintendent and FCMAT the power to require OUSD to close schools, which we already know they want OUSD to do,” she said.

School board members can follow two different paths—they can try to find cuts that do not involve closing neighborhood schools, or they can decide to let the state and FCMAT have their way, Swinburn said.

People should understand that closing schools does not save money, she said. “The big cost of operating a school is teacher salaries,” which are not reduced by closing a school and moving students to other locations.

However, closing schools could lead to a loss of students who leave the district for charters or private schools and cause “incredible hardship in Oakland,” she said, noting that the national research does not indicate that districts save money when they close schools.

“Kids in Oakland schools are already facing high levels of trauma and school instability in their lives,” she said. “This is not the kind of instability we owe to Oakland kids.”


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