{"id":1111,"date":"2026-05-10T09:35:54","date_gmt":"2026-05-10T09:35:54","guid":{"rendered":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/10\/sacramento-school-board-resists-state-agencys-urging-to-surrender-to-insolvency-3\/"},"modified":"2026-05-10T09:35:54","modified_gmt":"2026-05-10T09:35:54","slug":"sacramento-school-board-resists-state-agencys-urging-to-surrender-to-insolvency-3","status":"publish","type":"post","link":"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/10\/sacramento-school-board-resists-state-agencys-urging-to-surrender-to-insolvency-3\/","title":{"rendered":"Sacramento school board resists state agency\u2019s urging to surrender to insolvency"},"content":{"rendered":"<article><!-- --><!-- --><!-- WPS-5038 -- removed the script from WPS and added the placeholder for trinity player --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- --><!-- CONTENT --><!--[--><!--[--><\/p>\n<p>The mood in the Serna Center was decidedly grim Thursday night as the leader of a state financial agency told the Sacramento City Unified School District board that a state takeover is inevitable.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/10\/grant-napear-has-been-pulled-from-sacramento-radio-again-heres-what-to-know-2\/\">Grant Napear has been pulled from Sacramento radio again. Here\u2019s what to know.<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Michael Fine of the Fiscal Crisis Management and Assistance Team highlighted a word at the end of his presentation: \u201cgrief.\u201d That\u2019s the feeling associated with the reality of fiscal insolvency.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The emotional weight of the presentation was already apparent on the faces of the seven trustees, superintendent and student board member behind the dais.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>By FCMAT\u2019s analysis, the district will be out of money in February, if not January.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>There are still variables at play that could affect the date it runs out of cash \u2014 like the governor\u2019s May budget revision, which is anticipated to include more funding for schools \u2014 but Fine was clear: The district should request a state loan as soon as possible. If not, 5,000 school employees could go without pay until the loan arrives<b>.<\/b><\/p>\n<p><!--]--><!--[--><\/p>\n<p>Despite the somber mood, some trustees were not convinced that their fate was sealed. Several of them held onto hope that some or all of those uncertainties could work out in their favor and save them from insolvency.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cWe\u2019re not giving up,\u201d Board President Tara Jeane said.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Several were resistant to taking action on a loan anytime soon, but Fine emphasized a severe time constraint: the legislative schedule. If the district waits until after the current legislative session, it may not receive money until March or April, risking employees could go up to three months without pay.<\/p>\n<p><!--]--><!--[--><!-- --><!--]--><!--[--><\/p>\n<h2>School finance expert recommends state loan<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>FCMAT\u2019s analysis looked at cash flow projections based on the district\u2019s historic spending and the cuts it projected to make in its second interim budget. Fine noted that their analysis assumes the best possible outcome, and it\u2019s likely the district could come up short sooner than January.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The district is slated to run out of money soon before 2027, but will be saved by receiving an emergency advance on its tax apportionment of about $111.1 million. However, by the time the district would usually get this funding in the spring, the money will already be spent. All borrowing options will be exhausted by February, Fine said.<\/p>\n<p><!--]--><!--[--><!-- --><!--]--><!--[--><\/p>\n<p>Fine, a school finance expert for three decades, strongly recommended that the board take action now since the loan would have to be approved by the Legislature. It takes time to get that action moving, and the current legislative session ends Aug. 30.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>If the board were to wait until the next session, the earliest possible action would take place in late January, with funds becoming available in late March at the earliest, well after the district is projected to run out of cash.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>This has never happened in the history of California \u2014 the laws surrounding school bailouts and the creation of FCMAT were designed to prevent this scenario. If the district can\u2019t pay its staff or its utility bills, it\u2019s unclear how the district would continue functioning.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/10\/man-who-shot-20-year-old-dead-at-rancho-cordova-house-party-gets-maximum-sentence-3\/\">Man who shot 20-year-old dead at Rancho Cordova house party gets maximum sentence<\/a><\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cThat\u2019s why these statutes exist,\u201d Fine said in an interview. \u201cBut we need time to access those protections.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<h2>Trustees refuse state takeover<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Still, trustees Tara Jeane, Jasjit Singh and Taylor Kayatta see a path forward without invoking state help. Singh said that he didn\u2019t feel comfortable moving forward before seeing how much additional money the district could receive in the final state budget, adopted in June. School districts then have 45 days to revise their annual budgets based on the actual funding they will receive.<\/p>\n<p><!--]--><!--[--><!-- --><!--]--><!--[--><\/p>\n<p>FCMAT\u2019s cash flow analysis included the projections made for next year in the second interim budget, plus the district\u2019s actual spending through March 31. Jeane voiced concern that the analysis didn\u2019t include reductions identified since the most recent budget was adopted in March.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>\u201cWe are asking for a way forward based on the locally elected leadership that are represented here and based on the superintendent that we\u2019ve just hired with the full confidence that she\u2019s committed to this district and committed to making sure we do not need to go to the state,\u201d Jeane said.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>\u201cThat would be great,\u201d Fine said in response. \u201cJust know that every day marches on, and you get closer and closer to the point where you run out of cash.\u201d<\/p>\n<p><!-- --><!--]--><!--[--><!-- --><!--]--><!--[--><\/p>\n<p>\u201cIf we don\u2019t make any changes before then,\u201d Jeane said.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>\u201cGet the changes made,\u201d Fine said.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>A lot of changes would have to be made. So far this year, the district has identified $83 million over seven months, many of which represented one-time cost savings rather than ongoing savings, according to Interim Chief Business Officer Lisa Grant-Dawson. To stay solvent, the district would need to identify an additional $144 million between July and April.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<h2>What insolvency means for Sacramento<\/h2>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>The board is hesitant to submit to insolvency because of the  repercussions it will have on the community.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Taking a state loan means receivership \u2014 it means the loss of local control, the placement of interim leaders, rigorous oversight and indebtedness to California until the district can pay the loan back with interest.<\/p>\n<p><!--]--><!--[--><\/p>\n<p>Recently appointed Superintendent Cancy McArn would be out, to be replaced by a county-appointed administrator who would act in her role and assume the duties of the school board. The elected school board members would be powerless. The district would then have to meet over 150 standards set by FCMAT that range from financial management, student achievement and governance before the school board gradually regains its autonomy.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>But the borrowed money would still need to be paid. Funds that could go to programming that would benefit students would instead go toward paying off the loan.<\/p>\n<p><!-- --><!--]--><!--[--><\/p>\n<p>Even though elections will continue to be held, the trustees voters elected to office will hold no power, robbing the people of Sacramento of having any local control over district governance.<\/p>\n<p>Read more <a href=\"https:\/\/sandiegorelocationnews.com\/index.php\/2026\/05\/10\/californias-fires-have-changed-but-its-policies-havent-opinion\/\">California\u2019s fires have changed, but its policies haven\u2019t | Opinion<\/a><\/p>\n<p><!--]--><!--]--><!-- --><\/p>\n<p>This story was originally published <span>May 8, 2026 at 7:15 AM<span>.<\/span><\/span><!-- --><\/p>\n<p><!-- --><!-- --><\/article>\n","protected":false},"excerpt":{"rendered":"<p>Sacramento City Unified faces a cash crisis as FCMAT warns insolvency by February; board debates state loan, receivership and impacts on staff and local control.<\/p>\n","protected":false},"author":1,"featured_media":999,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[],"class_list":["post-1111","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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