Four months after control of the Oakland Unified School District was returned to local officials, they face a bleak financial reality that Superintendent Denise Gail Saddler warned will lead to cuts that cause “significant pain.”
In a letter sent to the community Thursday, Saddler — who stepped into the top role over the summer after the school board ousted longtime superintendent Kyla Johnson-Trammell — said that $100 million must be cut from the 2026-27 budget in order for the district to stay afloat.
“People we know and care about will lose their jobs. Programs our students love will be reduced or eliminated,” Saddler said. “Services our families depend on will change.”
The warning follows several months of financial crisis within the district. Just a few months ago, Oakland Unified was projected to run out of cash as early as fall 2025, with an anticipated $95 million budget shortfall. That deficit was reduced to $30 million, the district said over the summer, in large part through reduction and rearrangement of staffing. But district staff warned that Oakland Unified was still spending more than it receives and retaining too many employees with money the district simply doesn’t have.
The district faces more financial hurdles in the years to come, with a projected $78 million budget shortfall in 2026-27 and a $72 million budget deficit in 2027-28. Without significant cuts, district staff said Oakland Unified would likely go bankrupt, meaning it would once again need an emergency loan and would face the same state receivership it was under for 20 years.
The superintendent’s letter comes as Alameda County Superintendent of Schools Alysse Castro barely approved the district’s 2025-26 budget, saying it fulfilled the “absolute minimum” requirements to maintain local control and allow the budget to be approved by using one-time dollars and money intended for other programs to stay afloat for the current school year.
But Castro warned that the district will “almost certainly” fail to get through another school year without significant financial changes and criticized the board for failing to address the district’s “poor fiscal health.”
“Rather than provide clear direction for specific cuts or timeliness for board action, the OUSD board directed staff to create another new plan to make a future plan to address the same fiscal conditions that have been unaddressed for many years,” Castro said in a scathing letter to the district, referring to the school board’s October directive to staff to develop a plan to cut $100 million from the 2026-27 budget.
Castro said while it’s possible the district will finally identify and carry out cuts, the “board’s track record suggests otherwise.”
“OUSD’s history reveals an undeniable pattern: requesting plans, then disregarding them; rejecting staff recommendations; changing direction and directions, and, when difficult decisions are finally made, rescinding them shortly thereafter.”
Castro warned that the board will need to approve and implement budget solutions by the spring, if not sooner. She said that contrary to the “common narrative,” Oakland Unified has the necessary financial resources to stay afloat, with one of the highest per-pupil revenues of any district in the state — $27,343, according to the National Center for Education Statistics — and “incredible” taxpayer and philanthropy support.
“Everyone — staff, students, families and community members — is rooting for the district’s success,” Castro said. “But the path forward depends entirely on the board’s willingness to act. The authority is theirs. The responsibility is theirs.”
Oakland Unified School District board member Mike Hutchinson said Friday he fully agrees with Castro’s analysis of the district’s financial situation and he appreciates superintendent Saddler “sounding the alarm” on the crisis.
Saddler said the district will host a special meeting Nov. 19 to present at least two budget-balancing options, which the board will then have several weeks to review before making a decision at the Dec. 10 board meeting.
“The December decision will address our most immediate crisis, but it’s not the end of the conversation,” Gail Saddler said. “We still have hard choices that lie ahead for future budgets.”