The Oakland Unified School District's Board of Education voted on its 2026-2027 budget Wednesday, June 24, 2026, in what one report described as the board's final meeting before its summer recess. District staff presented the board with a budget containing what one outlet called "seemingly incompatible forecasts of a deficit, a surplus, and a balanced budget for the coming school year."
The projections forecast a $22 million deficit for the 2026-27 school year, but also effectively included plans for the board to identify $30 million more in reductions when it reconvenes in the fall. Once those cuts are made, district staff said, the district would have $8 million left over — a figure variously described during the meeting as both a surplus and an increase.
How OUSD Got Here
- Last fall, the district was projecting a $102 million deficit for the 2026-27 school year
- By early June, dramatic cuts had reduced that gap by almost two-thirds, to $38 million
- The June 24 budget assumes another $30 million in cuts, not yet identified, will be made this fall
- The budget incorporates about $32 million in added costs from a new teachers' union contract, rising to $60 million in 2027-28
- Next year the unrestricted general fund alone will contribute about $146 million to special education services
An Increase, Not a Surplus
Ruben Frutos, a fiscal advisor the district pays through the firm Hazard, Young, Attea and Associates, told the board the $8 million figure was being misdescribed: "This $8 million that has been discussed ad nauseum is not a surplus, it's an increase. It's an increase of our revenue based solely on the fact that there are $30 million in reductions" — cuts that have yet to be identified.
Not every board member was convinced the numbers made sense. "We can't have a surplus and a balanced budget at the same time as we have a deficit," Director Mike Hutchinson, who represents District 4, said, and cast the lone vote against the budget. Directors Rachel Latta, Jennifer Brouhard, VanCedric Williams and Valarie Bachelor voted to approve it; Director Patrice Berry was briefly absent and missed the vote, and Director Clifford Thompson was absent for the entire meeting.
During the same discussion, Hutchinson was even more pointed, accusing staff of an unusual and confusing budget presentation. "This is a game people are trying to play. This was developed by AI. It doesn't even make sense," he said. "It isn't how we list stuff. I'm waiting for somebody to tell me you can't have a deficit and a surplus at the same time."
Berry, for her part, said she wasn't fully comfortable with the plan but was not prepared to block it. "I have serious concern for all the reasons named about the $30 million," Berry said. "But I have confidence, given all of my conversations with staff and others and people across the state, that that $30 million is manageable. What I think is a more serious concern is how we manage the deficit and contain it so it doesn't grow year after year."
A Teacher Contract the County Says Endangers District Finances
The 2026-27 budget incorporates about $32 million in additional costs from a recent agreement with the Oakland Education Association, the teachers' union — a figure that is projected to rise to $60 million for 2027-28. OUSD settled those negotiations in February, agreeing to raises of 11 to 13 percent for all teachers depending on seniority, plus additional raises for special education teachers, early education teachers, nurses and social workers. The board tentatively approved the contract the same night it adopted the budget, pending any additional requests from the Alameda County Office of Education.
In a June 18, 2026 letter evaluating the contract, Alameda County Superintendent Alysse Castro warned that the agreement "endangers the District's fiscal stability." Castro's letter, described by one outlet as her third warning to OUSD in five months, noted that the district's plan to afford the raises requires $30 million in budget cuts during each of the next two school years without specifics about where those reductions will come from.
Special Education Costs Driving the Restricted-Fund Gap
Much of the district's remaining deficit sits on the restricted side of the budget — funds earmarked for specific purposes — and is driven by rising special education costs, Tara Gard, the district's deputy superintendent for business and operations, told the board's budget and finance committee ahead of the vote that the district's financial stabilization plan was aimed in part at addressing the district's contribution to special education. Gard said: "Each year it's growing, so it's about how we can manage that. If not manage it, then prepare for it better." State and federal funds cover only about 25 percent of OUSD's special education costs, leaving the district to fund the remainder out of its general fund, Oaklandside reported.
Why It Matters Now
The adopted budget leaves Oakland Unified in the same position it has faced repeatedly in recent years: a spending plan balanced on paper only if the board follows through, months later, on cuts it has not yet specified. The board is expected to take up the additional $30 million in reductions when it reconvenes for the fall semester.
DFP's Education Coverage
Dismal Freedom Press tracks school board budget votes, state education data releases, and district fiscal filings affecting San Joaquin, Stanislaus, Merced, Contra Costa and Alameda counties.