SCOE directly educates more than 30,000 children and adults each year—including thousands of district teachers who attend training sessions and workshops. Photo courtesy of Sacramento County Office of Education


SACRAMENTO, CA (MPG) - Today, Fiscal Advisor Luz Cázares appointed by the Sacramento County Superintendent of Schools to support the Sacramento City Unified School District (SCUSD) has acted to rescind the SCUSD Board’s action on July 30 to approve an agreement between SCUSD and the Sacramento City Teachers Association (SCTA). The Fiscal Advisor’s action is necessary to protect students, families and employees; the board must now adopt immediate, specific and viable solutions before the district runs out of cash.   

The Fiscal Advisor has taken this action with the support of  the Sacramento County Superintendent of Schools David W.Gordon and  the Chief Executive Officer of the state Fiscal Crisis and Management Assistance Team (FCMAT) Michael Fine who has presented FCMAT's analysis of the risks to the district's fiscal health and cash insolvency to the SCUSD Board since the fall of 2025. Of note, the concerns with the agreement between SCUSD and SCTA were shared and discussed with SCUSD leadership prior to the Fiscal Advisor’s decision to rescind the agreement.  

The district currently faces an overall structural deficit of approximately $221.8 million. The decision to rescind the district's agreement was based on three key factors. First, the agreement was to redirect assets from one account to another. Second, taking assets from the trust fund will cost more over time. Third, the agreement ties the district’s hands long-term.   

The long-term financial recovery of the district will take time and require extraordinary fiscal discipline, not just short-term loans and redirected funds, all of which must be repaid. The district is currently spending beyond its means and must identify the programs and services they are going to reduce or eliminate. It will be difficult to close the gap between what they are spending and what available funding will provide. The district has indicated that all options are on the table to resolve the structural deficit. However, the agreement which proposed to close the labor contract for the next three years makes any potential changes from that contract unavailable to provide one-time and ongoing solutions for the district. 

The Fiscal Advisor to a school district at risk of fiscal insolvency has an obligation under state law to stay or rescind any action taken by the district that is inconsistent with its ability to meet its obligations for the current or subsequent fiscal year. The agreement would only temporarily delay SCUSD's impending insolvency by a few weeks while also making it more difficult for the district to make a sustainable long-term fiscal recovery.  

At the time the SCUSD Board approved the agreement with SCTA, it also approved a list of additional actions to solve its budget crisis. However, many of these solutions are duplicative and lack the specificity necessary to ascertain their feasibility or, as with the agreement with SCTA, are problematic in other ways.   

The Fiscal Advisor has identified additional actions to improve its cash position with alternative solutions the district should act on and has also encouraged the district to refine its list of solutions by identifying and eliminating specific budgeted expenses immediately.  

Significant work remains for the district to resolve its fiscal crisis. SCUSD’s Board must take appropriate, responsible action so that SCUSD’s students, families and staff are not subject to the potential harms that would result if the school district runs out of cash. We are encouraging the district to make use of the additional fiscal experts we have provided to add to and refine its list of potential solutions and ensure that each solution is specific and viable so it can be implemented quickly.   

In summary, SCUSD cannot solve its fiscal crisis by merely delaying it. The Fiscal Advisor’s action is necessary to protect students, families and employees; the board must now adopt immediate, specific and viable solutions before the district runs out of cash.