Understanding Our Budget Challenge

What Happened and Why

Think of one-time funds like an inheritance. Money that was always going to run out. For several years, school districts across California, including OUSD, received special one-time money from the federal government to help recover from the COVID-19 pandemic. These funds, known as Elementary and Secondary School Emergency Relief (ESSER) and Learning Recovery funds, helped keep teachers in classrooms, run programs, and support students during an incredibly hard time.

Those funds are now gone. Oakland, like many other school districts, must now decide which programs best serve students and which can no longer be sustained without the funding that supported them.

Fewer families are enrolling their children in public schools. Fewer children are being born. Families are moving to lower-cost areas. There is more competition from neighboring districts, charter schools, private schools, and online options. Student attendance has also not fully recovered since the pandemic.

When fewer students are in class each day, the District receives less money from the state, because state funding is based on daily attendance.

The cost to operate the District is rising. From salaries and benefits to utilities to food to equipment, the cost of running a district has increased.

The Result: OUSD is spending more than it brings in. That gap is called a structural deficit. It is a sign that expenses are rising faster than revenue, and could lead to bankruptcy or failure if not corrected early. Without corrective action, Oakland risks losing the right to make these decisions at all.

The three main reasons for the budget gap:
The end of Elementary and Secondary School Emergency Relief (ESSER) funds and state one-time funds that school districts across California depended on.
Lower student enrollment than prior decades, which means less state funding coming in each year.
Rising costs, such as transportation, health care, and retirement, that go up every year.

That reality required Oakland to make a choice: act decisively, or risk losing the ability to act at all.