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Sacramento City Unified and its fiscal overseer, the Sacramento County Office of Education, withheld millions of dollars from each other as the financially troubled school district fell two years behind on $3.15 million in special education bills.
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The issue surfaced during Thursday’s board meeting, as trustees considered paying the county office for specialized day-program services provided to 36 district students during the 2024-25 and 2025-26 school years.
SCUSD was two years behind on payments, Chief Business Officer Gerardo Castillo said. The county office, meanwhile, had withheld just under $3.15 million in special education property tax revenue from the district, in part because of the unpaid bills, Castillo said.
Trustee Taylor Kayatta called the county office’s action “pretty startling by someone who’s trying to supposedly help us with our cash problem.”
Other trustees shared that concern, including Chinua Rhodes and Jasjit Singh, who ultimately agreed to approve the contracts but criticized the county office for withholding property tax revenue while overseeing the district’s efforts to remain solvent.
“Once again, when we talk about partnership and collaboration and working with, I think that shows SCOE’s ineffectiveness to assist the district,” Rhodes said.
“I also believe that we should pay this, just because it shouldn’t necessarily be a tit-for-tat.”
The district relies on SCOE to provide these services because it currently lacks an internal program equipped to serve these students, though it operated similar programs in the past, district officials said.
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The board approved the contracts in a unanimous 7-0 vote, with Singh requesting that the district return with a plan outlining what it would take to provide the specialized services internally.
The district classified the contracts as restricted general fund expenses in its presentation. More broadly, however, school districts generally use unrestricted general fund money to cover special education costs not fully funded by dedicated state and federal dollars.
Special education has become a major source of financial pressure for Sacramento City Unified, which faced a $222 million structural deficit. The district’s unrestricted general fund contribution to special education had more than doubled, from $73.6 million in 2018-19 to $172.3 million in 2025-26.
Singh pointed to the program’s $49,000-per-student cost in 2025-26 as “a keen example of how much special education actually costs.”
“And even those who are sitting in a space of oversight are also charging us at rates that are unaffordable, unfeasible, and actually unsustainable long-term,” Singh continued.
Meanwhile, Board President Tara Jeane removed a proposed increase in board member stipends from a policy update, as Kayatta said Wednesday would happen. The proposal had drawn criticism from community members after the district included it on Thursday’s agenda amid its ongoing fiscal crisis.
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This story was originally published September 4, 2026 at 7:23 AM.