The Sacramento City Unified School District is in the midst of a financial "crisis," according to a warning from a state oversight agency, which found the district's budget shortfalls could be larger than once anticipated at nearly $125 million by 2028. 

In a report to the school board on Thursday, the CEO of the Fiscal Crisis and Management Assistance Team (FCMAT), a state-created oversight and support agency, gave the school board an update on the findings that have the district at a high fiscal solvency risk level. 

The findings echo many of the same concerns raised in a similar review conducted more than seven years ago. 

In October 2018, FCMAT first warned the district about serious financial vulnerabilities, including ongoing deficit spending, weak reserves, budget development problems, and leadership instability. While federal COVID-19 relief funds temporarily boosted school district budgets statewide, FCMAT says that infusion masked SCUSD's underlying structural deficit. 

"You need to act quickly, time is of the essence," said Michael Fine, FCMAT CEO. "Every day that goes by in your current situation will make the next day worse."

The district is not expected to meet the state's 2% reserve requirement in 2025-2026, and officials warn that cash could run out by June 2026 if there are no significant solutions implemented. Budget projections show growing deficits of $51.6 million in 2025-2026, $86.8 million in 2026-2027 and $124.5 million in 2027-2028 school years. 

"There are difficult decisions to be made here. You've made some, by adopting the plan you now must make the difficult decisions of implementing. It's not something this district has done well [in the past]," Fine said. 

Administrators from schools across the district, represented by bargaining units, showed their support and solidarity on Thursday as, in a plan adopted last month, the board approved layoffs for 70 administrators. 

"What's really sad about this is it's completely avoidable. These are all decisions that were made against warnings repeatedly," said Garrett Kirkland, Principal at Hiram Johnson High School and UPE President.  

During public comment, administrators shared the greater impacts of the cuts to classrooms and students. 

"My school uses Chromebooks for online lessons. I ask, who's going to fix all those Chromebooks when they break? Who's going to keep the internet connections working at school sites? Who's going to monitor technology to make sure we're not victims of phishing scams? If you cut the administrators in charge of tech services, then my school will have a problem," said Belinda Bridgewater, Principal at Isador Cohen Elementary School in Sacramento. 

The FCMAT team offered next steps for the district, including regular updates on progress in closing the funding gaps. 

The board will review the fiscal solvency plan approved in November for potential opportunities for updates moving forward. 

Each board member was given an opportunity to speak after being presented with the reality of the financial situation, including that without changes, the district will be out of money by June 2026. 

"It's poor leadership on everybody's part. This hush culture, it needs to stop. I'm not gonna blame any one specific person. But when I wasn't on the board, it was hard to talk to people in central staff because of the hush culture; they don't speak to certain people, you're instructed not to and you're reprimanded when you do," said April Ybarra.

Ybarra added that while it may not be happening currently, it contributed to the culture at the district level in the past. 

Board President Tara Jeane said the leadership will focus on the future and solutions, not looking back on the past that brought them to this point.