Santa Rosa Schools Face Insolvency Crisis

District could run out of cash, triggering state takeover if major budget cuts not made

Published on Feb. 10, 2026

Got story updates? Submit your updates here. ›

Santa Rosa City Schools, the largest school district in Sonoma County, is on the brink of insolvency after years of declining enrollment and rising costs. The district must cut around $3 million from this year's $239 million budget and another $23 million for the 2026-27 school year to meet minimum reserve requirements. If the district runs out of cash before the end of the school year, it would trigger a state takeover, resulting in the dismissal of the superintendent, the school board being demoted to an advisory role, and a state-appointed receiver taking control of financial and policy decisions.

Why it matters

This crisis highlights the financial challenges facing school districts across California as they grapple with declining enrollment and rising costs. A state takeover would mean local control is lost, potentially for decades, and could result in significant job losses and other cuts. The situation underscores the need for school district consolidation to reduce duplication and overhead expenses.

The details

To meet minimum reserve requirements, the Santa Rosa City Schools board must cut about $3 million from this year's $239 million budget and another $23 million for the 2026-27 school year. District administrators are recommending the elimination of about 100 positions, including support staff, counselors, therapists and teachers. The plan also includes about $19 million in one-time savings from redistributing money from grants and other sources. These cuts would come on top of school closures and layoffs approved a year ago, as well as more recent cutbacks at the district office.

  • The Santa Rosa City Schools board will convene on Wednesday, February 10, 2026 to consider the budget cuts.
  • The district is at risk of running out of cash before the end of the 2026-27 school year.

The players

Santa Rosa City Schools

The largest school district in Sonoma County, with 12,500 students.

Michael Fine

Chief executive officer of the Fiscal Crisis and Management Assistance Team, a state-chartered fiscal oversight panel.

Got photos? Submit your photos here. ›

What they’re saying

“You have some serious cash issues — far more serious than any other district in the state.”

— Michael Fine, Chief executive officer, Fiscal Crisis and Management Assistance Team (Press Democrat)

“It sounds painful, it is painful. Please don't get to that point.”

— Michael Fine, Chief executive officer, Fiscal Crisis and Management Assistance Team (Press Democrat)

What’s next

The Santa Rosa City Schools board will decide on Wednesday, February 10, 2026 whether to approve the recommended budget cuts to avoid running out of cash and a state takeover.

The takeaway

This crisis in Santa Rosa highlights the broader financial challenges facing school districts across California as they grapple with declining enrollment and rising costs. It underscores the need for school district consolidation to reduce duplication and overhead expenses, as well as the potential consequences of failing to address structural budget deficits in a timely manner.