Oakland Schools Broke Again after 2003 Bailout

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 April 29, 2010 in Oakland, California.

Just 14 years after state regulators took over the Oakland Unified School District and used taxpayer cash to bail it out, the school district has managed to land itself in another huge financial crisis.

The district’s current annual deficit is $30 million, reports the San Francisco Chronicle.

Back in 2003, state officials stepped in because the school district had accumulated a $37 million budget deficit. The state of California loaned Oakland’s schools $100 million in emergency funds — a record amount at the time. State bureaucrats also seized control of the district for six years.

Oakland Unified superintendent Antwan Wilson — who will soon be leaving for an exciting new gig as the superintendent of the Washington, D.C. public system — swears the situation in 2017 is totally different than it was in 2003.

Last time, the district was caught unaware because of some alleged $100 million accounting blunder.

This time, the true facts are known, Wilson said.

“This is all in front of us,” the superintendent told the Chronicle. “This is all preventable.”

The problem facing the Oakland school district is — wait for it — a bloated and expensive spending plan that laughably exceeds the amount of money actually available.

As the Chronicle notes, there are some eerie similarities between the school district’s economic implosion in 2003 and its current economic status. Prior to the 2003 disaster, for example, then-superintendent Dennis Chaconas gave teachers a generous 24 percent pay raise. Also, a surprise drop in enrollment caused the district to receive less money from the state than expected.

This time around, the school board has generously given teachers a 14 percent pay raise. Also, enrollment declined by 850 students this year.

The current median salary for a public school teacher in Oakland, California is $60,536 per year, according to data from Salary.com.

The district has a problem with exploding special education costs, too. It spends $5.3 million per year to send 175 special education students to outside vendors for services. By way of comparison, the nearby San Francisco Unified School District sends just 130 kids to outside special education providers — but enrolls 20,000 more students.

A multitude of programs on the Oakland Unified chopping block includes an $800,000 plan for expanded preschool services.

Despite declining enrollment, school district officials admit that they probably can’t close any individual schools because of intense community opposition.

“If you don’t want to repeat history, you’re going to have to make decisions,” school board president James Harris told the Chronicle. “It’s a come-to-Jesus moment that’s got to happen.”

Oakland teachers union president Trish Gorman described the district’s woes as “a panic, run-on-the-bank kind of situation.”

A California Department of Education-appointed trustee still oversees district finances and will do so until the $100 million emergency loan from 2003 is paid off.

The expected payoff date is sometime in 2026.

The last time the Oakland Unified School District made national news was back in 2015 when school board members voted to phase out suspensions for students if they swear at teachers — or ignore teachers’ instructions, or tell teachers off or decide to spend time texting instead of paying attention in class. The move came in response to an Obama administration push to limit student punishments out of fears that the penalties are racially disproportionate.

 

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