PRESS RELEASE: Sacramento City Unified Opposes Proposed Change to Education Code Section 42127.6(k)

District urges lawmakers to reject a late session proposal that would add a new approval requirement before the State could intervene when county fiscal oversight is found ineffective
 

Sacramento, CA – Sacramento City Unified School District is formally opposing a proposal to amend Education Code Section 42127.6(k), which provides a state level safeguard when county fiscal oversight has not been effective in resolving a school district’s financial problems.

The proposed amendment, circulated on behalf of California County Superintendents and supported by the Sacramento County Office of Education, would require concurrence from the President of the State Board of Education, or the President’s designee, before the State could exercise that authority.

SCUSD has submitted a formal letter of opposition to state lawmakers and legislative leaders asking them to reject the proposal during the closing days of the legislative session. A copy of the District’s opposition letter is attached to this release.

The District believes a change this significant should go through the normal legislative process, with public hearings and input from school districts, county offices, locally elected boards, fiscal experts, employees, families, and other affected stakeholders.

SCUSD Is Taking Action to Restore Fiscal Stability

Sacramento City Unified recognizes the seriousness of its financial challenges and the need for continued corrective action.

On July 30, the Board of Education approved a Fiscal Sustainability Plan identifying more than $158 million in savings and other fiscal solutions. The plan exceeds the approximately $135 million projected cash shortfall identified through the fiscal oversight process by more than $23 million and also makes substantial progress toward addressing a projected structural deficit of just over $200 million.

The cash and structural deficit figures being cited through the oversight process are baseline projections that assume the District takes no meaningful corrective action. They are not projections of where SCUSD will end up after implementation of the Board’s fiscal plan.

SCUSD is already changing that trajectory.

The Board has approved substantial fiscal measures, implementation is underway, and additional work to address the remaining structural deficit continues.

“Our District understands the seriousness of the work ahead,” Superintendent Cancy McArn said. “The projections being cited assume the District does not act. We are acting. Our Board has approved a significant fiscal plan, we are implementing those solutions, and we will continue making the difficult decisions necessary to reach solvency, protect our classrooms, and retain local control.”

MOU Provides Nearly $100 Million in Cash Flow Support

A central issue in the current fiscal dispute is SCUSD’s Memorandum of Understanding with the Sacramento City Teachers Association, which provides approximately $98 million in cash flow support over three years.

The fiscal benefit of the MOU itself is not in dispute. SCUSD, SCOE, and the California Department of Education have recognized that the agreement provides savings and improves the District’s cash position.

SCOE’s disagreement centers instead on the use of certain funds and concerns about future fiscal and policy implications.

SCUSD believes those concerns can be evaluated, but the central fiscal question remains unanswered: how does removing nearly $100 million in cash flow support improve the District’s ability to remain solvent?

To date, the District has not received a fiscal analysis demonstrating that rescinding the MOU places SCUSD in a stronger financial position than allowing those savings to remain in place.

Although CDE did not grant the District’s appeal, the Department recognized that the MOU would improve SCUSD’s cash flow and ability to meet its financial obligations and raised concerns about whether SCOE’s rescission would be effective in resolving the District’s financial problems.

District Raises Concerns About Process and Transparency

Since early August, SCUSD, SCOE, and CDE have participated in multiple meetings regarding the District’s financial condition, the MOU, county oversight, and possible paths toward fiscal stability.

The proposal to amend Section 42127.6(k) was not raised with SCUSD during any of those discussions.

Trustee Jasjit Singh, who has participated in every meeting involving SCUSD, SCOE, and CDE during this period and has helped develop legal and policy arguments related to the District’s fiscal response, said the timing is concerning.

“I have been in every one of these meetings,” Singh said. “We have discussed the District’s finances, the MOU, county oversight, and our options under the law as it exists today. At no point was our District told that SCOE was supporting an effort to change the very provision of law that is now part of this process. If we are going to solve these problems together, we need to be candid with one another. Trust requires transparency.”

District Asks Lawmakers to Let Existing Law Work

Section 42127.6 gives county superintendents significant authority when districts experience fiscal distress. It also provides a state level mechanism to review whether county actions have been effective in resolving a district’s financial problems.

SCUSD believes both parts of that accountability system should be allowed to work.

The District has sought review under Section 42127.6(k) and opposes changing the law while that process is underway.

The proposed amendment also comes only weeks after enactment of AB 181, which substantially restructures California’s education governance system beginning in 2027.

SCUSD is asking lawmakers to reject the proposed amendment in any late session vehicle and require any future changes to Section 42127.6(k) to proceed through the normal public legislative process.

The District remains committed to working with SCOE, CDE, employees, families, and the broader Sacramento community to restore fiscal stability, avoid insolvency, protect students, and preserve local control of Sacramento’s public schools.

About Sacramento City Unified School District

Sacramento City Unified School District serves students and families throughout Sacramento and is committed to providing every student with access to a high quality education. The District is implementing a Fiscal Sustainability Plan focused on restoring long term financial stability, protecting essential student services, avoiding insolvency, and retaining local control.

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Attachment:  Sacramento City Unified School District Formal Letter of Opposition to Proposed Amendment to Education Code Section 42127.6(k)