How will OUSD pay for raises it granted teachers to avert a strike?

Oakland Unified School District narrowly avoided a teachers’ strike in late February by agreeing to raises of up to 13% over three years. But as the deal moves forward, it remains unclear how the district will finance it. 

The agreement came as OUSD faced a projected deficit of roughly $100 million and had approved layoffs of more than 400 positions. 

School Board President Jennifer Brouhard said in late March that the cost of the agreement was still being finalized and would be incorporated into the budget later this spring. Brouhard said the district did not yet know how much the agreement will cost, because staffing changes can shift as employees move into different positions. She did not respond this week to an email asking if anything had changed in the past two weeks.

The board must pass a balanced budget by June 30, but important funding details, such as the governor’s May budget revision, will not be factored until late spring. At the same time, the district has moved forward with layoffs as part of its effort to address the deficit. The reductions include a mix of central office positions and school-based staff.

Brouhard said the savings from those cuts are still uncertain as well, and that final estimates will not be available until mid-May. 

Board member Mike Hutchinson has argued that the district approved raises without a clear financial plan, and raised concerns over OUSD’s ability to maintain fiscal solvency. 

“When the school board puts an offer out to a union that we know we can’t afford, that is the definition of bargaining in bad faith,” he said in a recent interview.  

Hutchinson noted that staffing decisions were largely locked in after the March 15 deadline for issuing layoff notices. That restricts the district’s ability to reduce additional staff while it works to close the budget deficit. He said contracts with the teachers and support staff were made without a clear funding strategy. 

“There was never a fiscal solvency plan brought forward, a comprehensive plan looking at all of the options we have, for the board to vote on and approve,” Hutchinson said. 

‘Dire financial circumstances’

The board approved a contract with the Service Employees International Union on Feb. 25, granting a 16% salary increase over two years. SEIU represents classified staff such as custodians, office workers and support personnel. Employees in the union have “bumping rights,” Brouhard noted, which may allow some laid-off workers to move into other positions, making cost savings harder to calculate. 

Both contracts are retroactive to July 1. According to a report by Oaklandside, the SEIU contract could cost the district nearly $40 million over three years, and the teachers’ contract could cost more than $50 million. But Brouhard said recently that the district has not yet completed a cost analysis.

Asked about contract costs, how the pay increases will be funded and what the district’s projected deficit will be, spokesperson John Sasaki directed Oakland North to the district’s budget website. However, the information provided does not address these questions.

If the district is unable to pass a balanced budget, the Alameda County Office of Education could step in and increase oversight of its finances. OUSD only recently emerged from more than two decades of state control. 

“Even though the district exited receivership, there is little evidence that the local conditions that caused the district to fall into receivership have disappeared,” the Office of Education said in a  fiscal review released in February.

The review found the district has struggled to follow through on long-term financial plans and has “continued to change direction and postpone difficult decisions.” In approving the district’s budget, the Alameda County superintendent also warned that the board’s current actions are inadequate in addressing its “increasingly dire financial circumstances.”

Brouhard, who assumed office in January 2023, said the challenges the district is facing reflect long-standing structural issues in how it has managed its finances. 

“As a district, we have consistently spent money that we didn’t have or that we knew was going to sunset,” she said, referring to the use of one-time funding sources, such as post-pandemic money, to support ongoing positions without any long-term plan to sustain them.  

She said the current budget process, while difficult, could be an opportunity to establish a more sustainable system.

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