SF Board of Education Approves Budget Balancing Plan
San Francisco (December 14, 2021) - The San Francisco Board of Education (BOE) approved a budget balancing plan for the San Francisco Unified School District (SFUSD) at its regular meeting Tuesday that aims to stabilize SFUSD’s budget and meets a deadline imposed by the State to address an ongoing structural deficit.
Adoption of the "Proposed FY 2022-23 and FY 2023-24 Budget Balancing Plan" includes $90 million expenditure reductions (current year costs) and $35 million funding sources for each fiscal year. Accounting for cost escalation, these expenditure reductions and funding sources will address the projected deficits identified in the FY 2021-22 First Interim Report multi-year projections. Adoption of this plan will enable the Superintendent to recommend and submit a positive certification to the California State Superintendent of Public Instruction, indicating that the District and County Office of Education will be able to meet its financial obligations for the current and subsequent two fiscal years.
“We are committed to continuing to work with the Board of Education, families, students and staff to develop a sustainable budget that prioritizes the most effective ways to increase and improve services for our students,” said Superintendent Dr. Vincent Matthews. “If revenue projections improve, the highest consideration for funding restoration will be given to school site budgets, direct services, and central office services that most support students.”
Even before the pandemic SFUSD was facing a structural deficit. State funding through the Local Control Funding Formula (LCFF) has not kept up with growing costs such as healthcare, pension, and other retirement benefits; and growing programmatic needs of students. In fiscal year 2021-22 one-time federal and state funding sources were used to address a $100 million budget deficit.
In its budget balancing process, the district began implementing a Zero-Based Budgeting process to prioritize expenditures, categorizing district spending in three categories: Core Services, District Priorities, and Service Enhancements. Budget reductions in the District’s plan aim to 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.
The budget framework enables an equity-driven approach, where 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 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
Funding for schools is based on the number and characteristics of students served. For the past three years, school site budgets have not decreased proportionally to the decrease in the number of students they serve. The Budget Balancing Plan revises the district’s funding allocation to account for the decline in student enrollment. The impacts of these changes will vary site to site.
The State Superintendent of Public Instruction (SSPI) assigned a fiscal expert who assisted the district in identifying budget reductions and advised the district on its financial issues. The district also worked with the Fiscal Crisis and Management Assistance Team (FCMAT) to complete a Fiscal Health Risk Analysis (FHRA), which will be presented to the Board of Education in January 2022.
SFUSD will submit its fiscal stabilization plan for fiscal years 2022-23 and 2023-24 to the California Department of Public Education (CDE) in time to meet the December 15, 2021 deadline as directed by the State in a letter sent September 15, 2021. The approved budget balancing plan and any new information about projected revenues will guide the final 2022-2023 budget that must be submitted in June 2022.
Next Steps in Budget Development
Important work related to SFUSD’s budget and Local Control Accountability Plan (LCAP) will continue after Board action on the budget balancing plan. The milestones and phases to follow include:
- Continuing to explore patterns of central budgets (through January)
- Update the Board on the fiscal outlook based on the Governor’s budget (late January)
- Report to the Board on WSF and MTSS allocations (February)
- Revisit and update the balancing plan in the Second Interim report (February through early March)
SFUSD Superintendent Matthews joined with other large urban school superintendents in California to send a letter to Governor Newsom outlining common priorities for school district budgets across the state. These priorities include increasing baseline funding through the Local Control Funding Formula, addressing statewide patterns of declining enrollment, increasing funding for special education and alleviating increasing pension costs.
Read more about the 2021 Budget Balancing Plan.