The dust has barely begun to settle from the school closure fight and a sudden leadership swap. But the San Francisco Unified School District must now address a huge budget deficit – and doesn’t yet know how it will shake out.
Under new superintendent Maria Su, the district next week must send a plan to the state education department that shows how it will cut nearly 10 percent of its $1.3 billion budget, cuts driven by a yearslong drop in enrollment.
The top-line details have not changed for months: $113 million in cuts, mostly by eliminating more than 500 positions. But the Board of Education must vote on the plan at Tuesday night’s meeting without knowing details such as the number of teachers or central office staff that could be cut.
Attempts to reform and plan have hit snags because the district itself is notoriously opaque and siloed, limiting access to information that should be quickly shared across divisions. The central office also continues to work with a faulty personnel system, put in place in late 2021, that has caused payroll and onboarding chaos. Its replacement won’t be fully ready until at least next summer.
“They’re talking about tightening the belt when they can’t even get their feet in their pants,” said Cassondra Curiel, president of the teachers union, United Educators of San Francisco. UESF has about 6,000 members; it’s unclear how many positions they stand to lose in the coming year.
The union has vowed to fight personnel cuts and is coming off two victories: Three of the four school board candidates it endorsed in the election won seats, and it fought against the previous superintendent Matt Wayne’s school closure plan. In October, with extra pressure from Mayor London Breed, Wayne resigned and 11 schools proposed to close next summer won a reprieve.
Adding to the confusion, the district initially said each shuttered school would save $1 million, then later emphasized it wasn’t about savings but concentrating resources. It then estimated that its plan to close 11 schools would save up to $22 million, but officials declined to say how they reached the figure.
The budget fight figures to be painful as well. The state Department of Education has had partial control over SFUSD’s financial decisions since May because of a “negative” budget certification. This week’s budget check-in, required by law, is also labeled negative.
Elliott Duchon, the state advisor overseeing the district’s finances, says the new report won’t trigger a full takeover, but until the district turns its promises into actual cuts, it will remain under the state’s partial control.
“The one thing that’s true, they’re going to have to reduce the number of staff they have,” says Duchon. “In the end, we hope it’s not drastic, but they’ve got to at least be prepared for it.”
No takeover?
The T-word has hung over the district for years. In 2021, the board fought proposed cuts with an alternate plan to reduce the central office. Duchon, who had already begun working with SFUSD on its budget woes, warned against it. The crisis was staved off by an unexpected state windfall.
A rescue isn’t likely this time. As Superintendent Su replaced Wayne and ended his unpopular school closure plan in October, she and Mayor London Breed emphasized that the main focus must be this month’s budget report. They cited the threat of takeover, but the state’s superintendent of public schools, Tony Thurmond, declared it would not happen.
In an interview with The Frisc, Duchon backed up his boss’s assurance: “As much as everyone likes to wave that [warning] around, we don’t think it’s going to get there.”
Duchon says a full takeover would only come if the district runs out of cash and needs a loan from the state.
By no means is the district out of the woods. Without cuts, the district expects a $215 million deficit for the 2025-26 school year and $63 million deficit the following year, leaving it without enough cash to meet the state’s minimum reserve levels.
It plans to cut $113 million for the 2025-26 school year and $13 million the following year. Those numbers have not changed since district staff rolled them out in June. This level of cuts would still leave SFUSD with a $102 million deficit in the 2025-26 school year, but able to meet minimum reserve levels, according to new budget figures.
When Duchon and his team gained partial authority, the district felt the effect immediately. Every new hire for the fall 2024 semester needed review and approval from Duchon’s team. That oversight created a bottleneck, and the district had trouble filling empty positions at the start of the current school year.
The 535 position cuts, due before the fall 2025 semester, might not all come through layoffs. Another option is early retirement, which the district hopes to encourage through beefed-up benefits. The district estimates there are more than 1,200 eligible employees.
Some of those personnel might not be replaced, some might be replaced with less experienced and lower-paid staff. It’s not yet clear if the retirement proposal would save the district money. If it doesn’t, says Duchon, the district is not bound to follow through.
Right now we have destabilized school sites scrambling to cover for vacant positions that the district has been unable to fill.
UESF president cassondra curiel
The state’s financial situation remains a wild card for SFUSD. While a windfall like in 2022 is unlikely, the district must revise its plans based on Gov. Gavin Newsom’s draft budget next month, then again based on the May revision. (This is why the district annually sends out layoff notices on March 15, often to rescind them in May – a rollercoaster process that can leave staff demoralized and seeking jobs elsewhere.) The final budget for 2025-26 gets final approval in June.
SFUSD gets most of its funding from the state based on enrollment, which has dropped by 5,000 students since 2017 to about 48,000. Officials project the drop to continue to about 44,000 by 2032.
Central cuts again
The state budget and the retirement proposal aren’t the only variables in play. Matt Alexander, the school board member who spearheaded the call for deeper central office cuts in 2021, is raising that demand again. Alexander was just re-elected to his seat, barely making the cut by 200-some votes.
Because closures are off the table for now, “we have to make sure those schools can operate,” says Alexander, the current board president. “To pay for that, we have to make reductions in those other areas like central office and contracts. Those are essential if we’re to keep an adequate level of resources at schools.”
The level of cuts to the central office, union-represented teachers, and other staff must be negotiated in early 2025. There’s another layer of complication, however. The district’s new financial software system won’t go live until July 2025, at the earliest.
The current system is so fouled up that, in addition to years of payroll chaos, officials have poor insight into staffing needs – what’s known as position control.
It was public knowledge as far back as May how bad the system was. In an exchange with board member Lisa Weissman-Ward, state auditor Michael Fine said the district needed to know three things for each staff position: Was it approved in the budget? Was someone hired for that position? Have they been paid properly? “You’re making progress on the first leg,” Fine told Weissman-Ward.
Knowing the extent of the problem last spring didn’t prevent more problems. Officials unwittingly eliminated $30 million for legally required special education positions for the current school year. They caught the snafu as the semester started, but it still affected thousands of students.
Mission Local recently reported that SFUSD takes far longer to extract budget information from its system than “comparable organizations” do, according to a memo from SF’s retired city controller Ben Rosenfeld. One example is from the district itself – it found in October that for 2023-24 it spent $123 million less than planned, and ended up with $132 million more in its fund balance.
“We still have big question marks around what’s happening,” says Curiel. “Right now we have destabilized school sites. They’re all scrambling to cover for vacant positions that the district has been unable to fill.”
It’s going to be a stressful year. In addition to budget cuts, the district is rolling out new student assignment zones, pressing ahead with curriculum reform, and planning to spend the recently-passed $790 million facilities bond. The new board, which will have three new members, might also reopen the postponed debate over school closures.
All this, and there’s the new financial software to launch without messing up paychecks for months on end this time. In his memo, ex-controller Rosenfeld noted that “completion of any one of these projects would be a major accomplishment.”
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