07/31/2026
This evening, the Board of Education approved a new Fiscal Sustainability Plan which will allow us to avoid state receivership in the immediate future as we continue to address our long-term budget challenges. The budget solutions in this plan are targeted based on our community's priorities and designed to have the least impact on our classrooms. This plan is actionable and ready to start delivering immediate improvements to our cash flow and multi-year budget. The District's press release is below. Information on the plan can be found in the meeting agenda: https://www.scusd.edu/boe-dp/~board/boe-2025-2026/post/july-30-2026-special-board-of-education-meeting
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PRESS RELEASE: SCUSD Approves $158.639 Million Plan to Prevent Insolvency and Secure its Financial Future
Sacramento, CA – At its July 30 special meeting, the Sacramento City Unified School District Board of Education approved a comprehensive $158.639 million fiscal sustainability plan that will stabilize district cash flow, prevent insolvency, reduce ongoing expenditures, and establish a path toward long term financial stability.
The plan exceeds the district’s $150 million solvency objective by approximately $8.6 million. In a letter dated July 24, 2026, the Sacramento County Office of Education stated that FCMAT projected SCUSD could face a $135 million cash deficit by June 2027. SCOE further stated that the cash solutions in the prior memorandum of understanding would reduce the deficit by only $55 million, leaving the district responsible for identifying approximately $80 million in additional cash solutions to avoid insolvency. The approved plan exceeds the full projected cash deficit by approximately $23.6 million.
The plan combines immediate liquidity support with recurring reductions in programs, staffing, contracts, consultants, overtime, special education, transportation, technology, facilities, and other operating costs. The strategy is designed to minimize direct impacts on school sites, sustain major academic and student support programs, and prioritize reductions in contractual and non-classroom expenditures.
The Board also approved a new three-year agreement with the Sacramento City Teachers Association, SCUSD’s largest labor partner. The agreement is expected to provide nearly $98 million in cash flow support over three years, addressing immediate liquidity needs while supporting the district’s long term expenditure reductions and structural reforms.
The three-year SCTA agreement creates greater certainty around labor, healthcare, and benefit costs in future budgets. It also allows the district and its largest labor partner to shift their focus away from ongoing negotiations and toward student achievement, staffing stability, program quality, and successful fiscal recovery.
This plan will prevent insolvency and place SCUSD on a stronger financial foundation. It will allow the district to rebuild as a more efficient, responsive, and sustainable organization that reflects current enrollment, student needs, and fiscal realities while protecting essential services and delivering the high-quality education every SCUSD student deserves.