Budget Balancing Overview
What is a structural deficit? How did SFUSD get here?
SFUSD is experiencing a structural deficit –– even before the pandemic the district’s expenditures exceeded its revenue. Along with decreased student enrollment, which deepens the deficit due to revenue loss, rising costs associated with teacher/staff pensions, expanded services,and special education services, among other expenses, are contributing factors.
While SFUSD has sought to address the budget forecast to soften the impact on schools, including making reductions to Central administration in the last few years and exploring additional funding sources, current projections show estimated deficits of at least $125M for the districts’ next fiscal year, 2022-23
What is the budget balancing process?
The California Department of Education notified SFUSD that although its budget for the current fiscal year has been approved, the size of projected future deficits raised serious concerns about SFUSD’s ability to meet financial obligations in FY 2022-23 and 2023-24.
How will the budget balancing affect my child(ren) enrolled in SFUSD?
The budget process will generate a balancing plan for the District, which may impact staffing and services that are being provided both directly to students through reductions in positions working with students and indirectly through reductions to central support services for schools.
What is the California Department of Education’s (CDE’s) involvement in this process?
The State Superintendent of Public Instruction (SSPI) has assigned a fiscal expert to assist SFUSD in identifying budget reductions and advise the District on its financial issues. Additionally, in compliance with CDE’s direction, the District is working with the Fiscal Crisis and Management Assistance Team (FCMAT) to conduct a Fiscal Health Risk Analysis with an estimated completion of mid-December.
What is the timeline for developing and implementing the Budget Balancing Plan?
By December 15, 2021 SFUSD must submit a Board-approved Budget Balancing Plan for FY 2022-2023 and FY 2023-2024 to the California Department of Education, which details how SFUSD will balance its budget. The Plan will be implemented through the Local Control and Accountability Plan (LCAP) process, and will be actualized through central and school-site budget planning processes in Spring 2022.
What is the Budget Balancing Plan that the board must adopt by December 15, 2021?
The magnitude of the budget challenge warrants a strategic, priorities-based approach. SFUSD is required to prepare a balanced operating budget and Multi-Year Projections (MYP). Through zero-based budgeting, SFUSD aims to preserve fundamental functions and priority services to support each and every student and each and every school by making resource allocations with all schools and students in mind.
How will SFUSD determine its funding priorities?
The District is preparing to submit a budget balancing plan by December 15, per California Department of Education requirement, by following a Zero-Based Budgeting process to prioritize spending. The Zero-Based Budgeting process categorizes District spending in three categories: Core Services, District Priorities, and Service Enhancements. Budget reductions will scale back Service Enhancements, identify ways to configure the delivery of Core and Priority services more efficiently, and preserve high leverage and high impact investments.
What is the rationale behind the proposed budget changes SFUSD’s leadership shared with the SF Board of Education in early November?
The proposed budget framework enables a more equity-driven approach, whereby school sites can have more flexibility when developing site budgets that can be responsive to the unique needs of students within each school community. The proposed plan adopts the following rationale and guiding principles:
- Scale back service enhancements across central functions
- Identify programs that serve low numbers of students, both as a result of and beyond declining enrollment districtwide
- Reduce duplicative investments such as similar services managed by multiple central office divisions
- Identify allocations that are the result of a previous priority that is no longer applicable (legacy programs, one-time funding agreements that continue to carry over)
- Identify programs without strong evidence of student impact
What is the proposed shift in the funding formula for school sites, and how does this change affect school site budgets?
Funding for schools is based on the number and characteristics of students served. In other words, schools receive an allocation for each enrolled student and what types of services those students need; i.e. English Learners, students with special needs, etc. For the past 3 years, school site budgets have not decreased proportionally to the decrease in the number of students they serve.
The proposed Budget Balancing Plan revises the District’s funding allocation for Weighted Student Formula (WSF) and the Multi Tiered System of Supports (MTSS) based on the decline in student enrollment. Using Zero Based Budgeting, the Plan will increase the baseline allocation to school sites to raise the minimum across all schools using WSF funding. However, while the minimum per student is increased in this formula, there is less funding for equity weights allocated for English Language Learners, students who qualify for Free-and Reduced-Price Meals, students in foster care, students residing in public housing, unhoused students, and incoming proficiency in secondary grades.
The impacts of these changes would vary site to site. However, not all sites will necessarily lose funding, particularly if they have experienced enrollment growth in recent years. School sites can also have even more flexibility when developing site budgets that can be responsive to the unique needs of students within the school community.
How is the Budget Balancing Plan different from the budget that will be adopted in June?
The Budget Balancing Plan will be actualized through the LCAP budget planning process to generate the final budget that is adopted in June for the next school year.
When will the Balancing plan go into effect?
The SFUSD Board of Education will vote on the Budget Balancing Plan on December 14 so that SFUSD can submit an approved plan to the California Department of Education by the December 15 deadline. As budget projections continue to evolve beyond December, financial projections will continue to be updated beyond the adoption of the Plan.
Will there be layoffs?
There may be staff positions filled that the district will no longer be able to afford under the budget-balancing plan. While every effort will be made to sustain our existing workforce, in some cases there may not be an appropriate placement for every employee whose job is impacted.
Isn’t there a staffing shortage?
Yes, when it comes to some credential areas and specific roles, SFUSD, like many other districts, is impacted by the staffing shortage. However, it is not always possible to fill a vacant position with someone who is in a position that may need to be eliminated as it depends on their credentials/qualifications and other factors.
How does the budget balancing process relate to the Local Control and Accountability Plan (LCAP)?
The budget balancing process will produce a balancing plan which includes a package of strategies to stabilize SFUSD’s budget, along with details about how the plan will be actualized and what the projected impact will be on SFUSD schools. The Budget Balancing Plan is one of the major activities and milestones associated with the LCAP, which is still in effect since SFUSD’s official budget for FY 2022-2023 needs to be approved in June, similar to other years.
What is SFUSD doing to pursue additional revenue and budgetary remedies?
While District leaders continue to explore and pursue remedies to increase revenue, the Budget Balancing Plan is based on current assumptions that must be adopted and submitted to the California Department of Education.
SFUSD is joining other school districts to advocate for increased school funding in local and statewide budgets, including the Governor’s proposed budget, which SFUSD hopes will include Local Control Funding Formula (LCFF) protections from the statewide impact of decreases in enrollment, increased funding for Special Education services, and other priorities.
What is happening with the money raised from Proposition J, a recent ballot initiative?
SFUSD is fortunate enough to receive funding from diverse revenue streams, including through voter-approved ballot initiatives such as Proposition J, which was passed in 2020. The ballot parcel tax revenue stream will provide SFUSD with an estimated $48 million per year to:
- Raise teacher salaries; specifically, an across the board 7% raise for every teacher in the SFUSD
- Improve and maintain academic programs in reading, writing, math, science and technology
- Raise the salaries of other critical educators, especially para-educators
- Support recruitment and induction of teachers
- Support professional development for staff
- Provide innovative programs at schools with the greatest challenges
These funds are already included in current revenue projections and therefore do not decrease our projected deficit
Family and Community Engagement
What role do families play in the budget process?
Is there an opportunity for the SFUSD community (students, families, SSCs, teachers, principals, etc) to give feedback on the Balancing Plan due by December 15?
SFUSD staff and leaders have held multiple meetings with diverse stakeholders, such as students and families, site leaders, labor, and other partners and community-based organizations. SFUSD shared an update of family and community engagement efforts during the October 26 Board of Education meeting.
SFUSD is partnering with the Parent Advisory Council and Parents for Public Schools to engage interested SFUSD families in learning more and understanding ways to share input.
What are key dates that families and community members should be aware of in order to get involved?
The budget balancing process involves a series of conversations among SFUSD policymakers and community stakeholders to develop shared understanding and gain clarity towards decision-making. The plan must be final by December 14, 2021.
SFUSD staff has identified the following information and decisions timeline:
Plan introduction and Shared Learning
- November 2- Committee of the Whole
- November 9 - Regular Board Meeting
- November 17- Budget and Business Services (Off Cycle)
Discussion, Specific Feedback and Iteration As Needed
- December 1- Budget and Business Services
- December 7- Committee of the Whole
Vote and Adopt the Budget Balancing Plan
- December 14- Regular Meeting