This has been a, uh, difficult year to try and keep track of what's actually going on with the OUSD budget. It doesn't help that I just started doing it this year, nor does it help that there seem to be constantly competing narratives, often aligned with political interests, that obfuscate facts with rhetoric and make clarity a very difficult thing to come by. I've watched the last few board meetings, tracked what the district and its detractors are saying, and tried to present what I think is really going on here.

What We Know

NB! I'm framing what's in this section as known facts simply because it's based on what OUSD has now sent to the county for review. I have a whole section below about what would be going on if these things were not facts, and if the district is lying to everyone.

On June 24th, the OUSD Board of Education approved the 2026-27 budget presented by district leadership.¹ They also presented a financial stabilization plan update, which I'll get to in a bit. Highlights:

• The district's structural deficit, once believed to be over $100 million² yearly, is now projected to be about $22 million for 2026-27.³
• This budget was not "balanced" even though they used that word (sigh), and OUSD has identified Section A of its stabilization plan⁴ for next year that the board will need to approve to close the gap entirely.
• These numbers do not include the final (more positive) revenue numbers from the state, or any increases in attendance, which could add up to as much as $12 million in ongoing additional revenue.⁵
• The budget also does not book historic increases⁶ in specific grants, such as the AB 602 Special Education base grant, that the governor has already committed to.
• The final numbers from the Governor (and I'm presuming attendance) will come August 15th.⁷ Then the budget will book those final numbers and be finalized.

This means that even a pessimistic estimate puts the actual structural deficit for next year at around $10 million.⁸ Before you start saying this is some sort of miracle that nobody can explain, consider these things in the public record, they were never kept a secret:

1. OUSD presented a first interim budget report on December 10th, 2025. In it, the district faced a $102 million structural budget deficit for 2026-27. The superintendent was directed by the board to close that gap with various measures including drastic cuts to the 2026-27 budget, protecting services that face students wherever possible.
2. After the district, in collaboration with the firm they hired (HYA⁹), reviewed the financial picture and leaned hard on re-classifying as many expenses as possible to use more "restricted" funds (of which there is currently a surplus), and relieve pressure on the general "unrestricted" fund, which is where most of the structural problems exist.
3. After pricing in new labor agreements with the teachers and staff unions (OEA and SEIU) the district submitted AB1200 disclosures to the county (ACOE), putting the cost of labor agreements at about $46 million¹⁰ combined.
4. With the labor agreements priced in, the district worked to reduce the structural deficit in its general fund through reclassification of investments (as stated above), a set of difficult layoffs, and sweeping cuts to school sites, as well as contract reviews, a hiring freeze, and other measures.

The numbers are in, they are public, and there is still a significant deficit, but it is like a tenth of what it was stated to be six months ago. To anyone, this should probably represent a drastic improvement in the financial picture!

The way that district leadership has been framing this, for many months now, is not that the problem is solved, but that this is the period during which the district's finances need to be stabilized to maintain solvency and local control. For 2026-27, it looks like it has accomplished this goal.

Next Year and Beyond

As much as I'd like to dwell on this positive development, there are still pretty stark numbers to talk about. The district presented its multi-year projections in a presentation of its financial stabilization plan, and they were up front about the challenges that still lie ahead. To summarize:

• The district must find, and the board must approve, $30 million in deficit reductions during the 2026-2027 school year, though they believe this will be reduced by state revenue. Even with optimistic projections, cutting tens of millions mid-year will be very tough.
• The picture doesn't improve for 2027-28, which I've already highlighted as the true make-or-break budget year; The cost of labor agreements goes up that year and the district will (as of current projections) have to find additional cuts of ~$30 million¹¹ for that school year.
• The following year calls for "only" $10 million in reductions. Once again, this is what is currently projected.

What happens this fall is all of a sudden incredibly important. In the stabilization plan presentation, one slide actually pointed to $28 million in planned cuts that have not yet been approved by the board. Just so you don't need to go looking, here are the amounts they broke out for 2026-27:

1. Reduce the special education contribution by 10% ($14.7M)
2. Feasibility study of nonpublic school placement on OUSD property ($0.2M)
3. Second-tier contract and discretionary spending review ($1.0M)
4. Centralized procurement of materials and services ($0.4M)
5. Fleet management system (future savings) ($0.5M)
6. Decrease RRMA expenditures ($2.6M)
7. Reduce school site access to unutilized spaces ($1.0M)
8. Central office reductions, additional combined ($7.5M)
9. School site budget reductions ($0.2M)

If the district can actually realize these savings in this coming year's budget, it'd be a welcome development on the fiscal solvency front. On the other hand, a 10% reduction in the use of general fund dollars for special education expenditures (which is over half of this entire goal) will require hard work to realize. (Note that we are currently not sure what the real impact of the huge increase in SpEd funding will be on OUSD yet, those numbers are tough to suss out right now.¹²)

So yeah, there's a lot of work left to do here, and not a ton of time to do it. It is nice to see that the district has some indication of where it can look for additional reductions, but the real worry is how it will be able to provide the services it must in the face of such drastic cuts.

But… Is It Fraud?

Quite frankly, I am consistently frustrated and exasperated by the district's messaging around the budget. At many points this year, the way they've chosen to release information has only added to the confusion and mistrust of the community. While I do believe that efforts were made to provide transparency at some points, the result was muddled and in many cases indecipherable to most of us who were paying attention. I acknowledge that since pretty much every minute needed to be spent trying to actually keep OUSD solvent, keeping us all up to date wasn't properly prioritized. District communications need to improve immediately and dramatically, and I truly hope they do.

Nevertheless, things are often done badly without malicious or devious intent, and that is exactly what I believe is going on here.

The general narrative around what is going on with the district's finances has been chaotic and grim for many months. Local independent media sources (almost all of them) seem to have thrown up their hands when trying to sort out (admittedly opaque) details, and instead have opted to dismiss what the district is saying. They and others favor a simpler picture: That this can't be true, that someone is lying, incompetent, or both.

At the center of this is District 4 Board Director Mike Hutchinson. In addition to what I believe is deplorable, disruptive, and needlessly disrespectful behavior at board meetings, he has repeatedly accused district leadership of lying, fraudulent behavior and malfeasance. Rather than attempt to foster any actual understanding of the process by the public, Director Hutchinson instead chooses to exploit the arcane nature of it, driving others to the conclusion that because it doesn't make perfect sense, it's got to be a big lie.

I hear this so often from Hutchinson and his supporters that I often wonder who is gaslighting who; as someone who spends a lot of time looking at all this budget stuff, and who has developed good relationships with the educators, leaders and board directors working on the problem, it would be incredibly tragic to find out they are all lying. Not just to the public, but to my face.

I reassure myself with the actual facts in evidence:

1. The numbers that the district presented at the June 24th Board Meeting were very closely aligned with what they have been saying for the entire spring.
2. Every single presentation I've seen the district make acknowledges the hole they are in, and makes it clear that the changes coming will be felt across the entire community.
3. The Superintendent of Alameda County, not really OUSD's best buddy right now, accepted the numbers provided in late May and acknowledged publicly (with the same reservations that the district has) that the district can in fact meet its financial obligations next year.¹³
4. All the numbers will now be audited for accuracy and adjusted to incorporate final state numbers in August. If everyone's lying, we're all gonna find out about it soon.

I guess in the end it defies common sense that there was some massive amount of fraud going on here. Who thinks they'd get away with it? What would the point be? If they are lying, why don't they make things sound a bit better?

But really, the most important question to ask is this: Where is the proof of fraud, malfeasance, and lies? If there is such evidence, why hasn't it been presented alongside the accusations, the way we usually try and function in any accountability-based system? Most of all, why do journalists continue to quote Mike Hutchinson's accusations without the modifier "said without evidence"? The New York Times learned, maybe a bit too late, that they should probably not just print what Donald Trump said out loud without specifying whether or not there was evidence to support what he was saying.¹⁴ Why does this fraud narrative get a pass on that same stringent standard?

As much as I want to turn this around and start making unfounded accusations myself, I will have to settle for pointing out the obvious: There are strong forces at work trying to shape this narrative against any hint of actual progress. They want the community to think that there is nothing being done to solve OUSD's problems, and that everyone involved needs to be run out of town. If instead we agree with the district, several board members, and the Alameda County Superintendent that the numbers are real, then the baseline numbers we are seeing now represent positive movement as the result of significant work. It is time for everyone interested in solutions to acknowledge that, so we can cut down on the noise and conjecture and get back to work.