By Ken Epstein

After 20 years under state control, the Oakland Unified School District (OUSD) will regain local authority over its budget and day-to-day decision-making, emerging from an era of austerity when the district was forced by state-appointed overseers to close more than 40 mostly flatland schools, eliminate educational programs, and cut millions of dollars in services for students and classrooms.

After making its final payment on a $100 million state loan at the end of June, the district in July will again be under the authority of the local school board, like other districts statewide.

The decades of direct intervention by state officials, Alameda County education officials and a powerful, state-funded regulatory agency, the Fiscal Crisis Management and Assistance Team (FCMAT), will finally come to an end in July, according to the office of State Superintendent of Schools Tony Thurmond.

The official narrative of the state takeover is a simple one: the district overspent its budget, and the state altruistically stepped in to rescue it.

But the truth behind the takeover is far different. It’s a story of raw power, greed, and racism.

When the state declared the district insolvent in 2003, OUSD had a $39 million deficit, and funds in a reserve account sufficient to loan itself funds to cover the deficit, a practice that was common in other districts. However, the state would not allow Oakland to use its own money to cover the shortfall.

The state stepped in, fired Supt. Dennis Chaconas, eliminated the authority of the Board of Education, forced the district to take a $100 million loan that it neither needed nor requested, and appointed a receiver, Randolph Ward, who reported to the state schools’ superintendent, making all the decisions related to the operation of OUSD, including how to spend the $100 million loan.

Not only did the district have to repay the loan, it had to pay the salaries of the various overseers it was required to hire.

Involved in the drive to take control of the district and sell school properties was Oakland’s then powerful State Senator Don Perata, who had been pushing for several years to take control of the district, unsuccessfully attempting to sell the district’s Second Avenue headquarters to real estate developers.

Other local business and political leaders, including State Supt. of Schools Bill Honig, were determined to eliminate the power of the Black majority school board, which was seen as an impediment to the agenda for business as usual.

Among recent interventions by Oakland’s outside overseers was in 2021, when the district, with broad community support, was about to adopt a resolution for “Reparations for Black Students.” The outside trustee spoke at a school board meeting to block the passage of the measure until the board removed wording that would have protected predominantly Black schools from being closed.

In 2024, during district negotiations with administrators, the trustee did not allow the board to approve more money unless it agreed to guidelines to close and merge schools.

In a letter to the district, Alameda County Superintendent of Schools Alysse Castro agreed that the district has done what is necessary to regain local control but that challenges remain.

“These improvements co-exist with ongoing concerns that OUSD must still confront its structural deficit and address the long-standing overinvestment in small schools,” she wrote.

“However, these are challenges of local policy and the domain of a locally elected board of education, not of mismanagement or financial misconduct,” Castro wrote.

“Continuing to require a trustee to backstop them risks continued delay in local ownership and accountability and reinforces a counterproductive narrative that feeds resistance and undermines the board’s willingness to engage their community in making necessary tradeoffs.”

Going forward, the district still faces financial difficulties. According to reports, the board must make $73 million in cuts to the 2025-2026 budget and an additional $17 million from the 2026-2027 budget.

Ken Epstein

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