Sacramento City Unified spent Thursday night discussing its budget before a county rejection that came Friday. The Sacramento County Office of Education disapproved the district's revised budget, citing a significant projected negative year-end fund balance and saying it lacked enough information to assess cash flow and financial obligations. The number attached to that disapproval is a projected negative unrestricted balance of $166.3 million by year's end.
The unanimous vote came earlier, and it was not the last word. As the Sacramento Bee reported, trustees approved the September revision the prior week, before the county's later disapproval. At a subsequent Thursday meeting, board members indicated they might not seek a waiver.
What The County Would Not Sign
The disapproval turns on more than one figure, and the figures do not describe the same document. The county office's objection centered on that $166.3 million negative unrestricted balance, plus inadequate information on cash and obligations. Separately, the county said the district's June budget projections showed an ending fund balance of negative $646.1 million by 2028-29 and failed the state's 2 percent reserve requirement, the Bee reported.
Those June projections are not the September plan trustees adopted. June set a multiyear path the county would not accept. The September revision was a different budget document. When the county said the projected unrestricted balance was $166.3 million below zero and that it still could not judge cash flow or obligations, it rejected the revision as a workable budget.
The longer June outlook is harsher still. An ending fund balance of negative $646.1 million by 2028-29, paired with a missed 2 percent reserve, is the picture the county said it was looking at before its later disapproval. That is a three-year slide, not a one-year accounting dispute.
A $162,000 Surplus On Paper
The September revision projected a balanced budget and positive cash flow through June 30, with a surplus of $162,000. Set beside the June-adopted budget's projected $228.9 million deficit by the end of the 2026-27 school year, $162,000 is a plus sign on a very thin margin. It is the district's claim that the immediate year can clear. It does not retire the longer deficit.
The board approved the September plan unanimously, before the county's later disapproval. At a subsequent Thursday meeting, board members indicated they might not seek a waiver.
A surplus that small leaves almost no room if a revenue estimate slips or a savings item arrives late. The county's complaint was that it could not assess cash flow and obligations from the information in front of it. A $162,000 margin does not, by itself, answer that complaint. It does show how far the September revision sits from the June-adopted forecast of a $228.9 million hole by the end of next school year.
A Waiver In The 2018 Dispute
In the 2018 budget dispute, trustees voted to waive a budget review committee, the Bee reported. County Superintendent David W. Gordon said he planned to approve that waiver. If the state department approved it as well, he said he would take an active role in the district's budgeting process.
In that 2018 dispute, the waiver terms required the district to trim $66.5 million from its three-year budget projections and adopt a balanced budget before Dec. 31.
The sequence is easy to lose. The county disapproved a revised budget. At a later Thursday meeting, board members indicated they might not seek a waiver. The $162,000 surplus belongs to the September revision, which trustees had approved unanimously before the county's disapproval.
A Deficit That Kept Moving
The hole did not open on Thursday. CapRadio reported that the district's estimated deficit rose from $43 million in December to more than $170 million by March 19. That climb came before the June adoption and well before the county's later disapproval.
In July the district put forward a fiscal solvency plan aimed at $150 million in savings and said it had identified more than $158 million in possible reductions. By Aug. 20, Sacramento City Unified reported that it had achieved $36.7 million toward that goal, including one-time savings, according to the district's fiscal accountability page. One-time money helps a cash year and vanishes the next. At that August mark, most of the identified savings were still ahead of the district.
$36.7 million against a $150 million target is real progress and a long way from the finish. It also sits in a different column from Thursday's $162,000 surplus. Savings already booked, savings only identified, and a one-year surplus in a new budget revision are three different claims. The county's disapproval suggests the version it reviewed did not make those distinctions clear enough to sign.
Empty Seats And A Familiar Waiver
CapRadio has reported that enrollment has fallen almost every year for two decades, that district forecasts show it falling further, and that 22 of the district's 72 schools are less than half full. The station has tied those empty seats to a budget that keeps getting worse. Fewer students do not automatically shrink a district built for more of them.
This is not Sacramento City Unified's first trip through a county disapproval. The Bee reported that the county office disapproved the district's budgets for three consecutive years, from 2018-19 through 2020-21, and that the district received a waiver from state review each time. At a Thursday meeting during the current dispute, board members indicated they might not seek a waiver.
At a Thursday meeting during the current dispute, board members indicated they might not seek a waiver. The $162,000 surplus belongs to the September revision, which the board approved unanimously before the county's later disapproval.
