SF Board of Education Adopts Plan and Budget for 2022-23 School Year
San Francisco (June 29, 2022) - The San Francisco Board of Education adopted its Local Control Accountability Plan (LCAP) and $1.1 billion total operating budget for the 2022-23 school year.
While the fiscal outlook for the San Francisco Unified School District (SFUSD) has improved, the district remains focused on addressing a structural imbalance in its budget. In December 2021, the Board of Education adopted the FY 2022-23 and FY 2023-24 Budget Balancing Plan, which included expenditure reductions. Later, in March 2022, the Board of Education adopted an amended Balancing Plan that recognized new state revenue, which allowed for the restoration of funding to schools and direct services to schools. The adopted balancing plan addressed the $125 million projected budget deficit through $49 million expenditure reductions and $76 million funding sources.
“Thanks to the hard work of many, our adopted budget ensures a positive outlook for the next three years,” SF Board of Education President Jenny Lam said. “As we continue to address our ongoing structural deficit, we are committed to making decisions that support our students, their learning and well-being and to move towards stronger financial footing in the long term.”
The district used a Zero-Based Budgeting lens that focused on prioritizing expenditures and exploring opportunities to increase revenues. The Zero-Based Budget process prioritized district spending in three categories: Core Services, District Priorities, and Service Enhancements. By identifying ways to scale back Service Enhancements, reduce priority investments, and configure the delivery of core and higher priority services more efficiently, all effort was made to minimize the impact on students. Additionally, staff framed expenditure categories according to major functions, including Direct, Indirect, Operating, and Administrative Services. This approach of identifying and prioritizing types of expenditures based on student impacts helped district staff engage in conversations with the Board of Education, school site leaders, labor partners, parent groups, and other stakeholders to gather valuable perspectives that have informed SFUSD’s strategies.
The majority of SFUSD's total operating budget consists of the Unrestricted General Fund, most of which funds school-based supports, including employee salary and benefit costs. The next largest portion of the budget, the Restricted General Fund, amounts to 38% of the overall budget, including local voter-approved funding such as the Public Education Enrichment Fund (PEEF) and parcel tax revenues.
The district’s budget reflects an increase in funding from the state: SFUSD expects to receive $571.3 million from the Local Control Funding Formula (LCFF), California’s primary source of state education dollars.
Given that the impacts of COVID-19 are statewide, for the FY 2021-22 budget, Local Education Agencies (LEAs) were allowed to budget according to attendance in FY 2019-20, prior to the start of the pandemic. This held school districts “harmless” for changes in ADA resulting from school closures and recognizing that traditional forms of attendance were not possible during distance learning. In FY 2022-23, SFUSD expects to use the average of the prior three fiscal years to determine funded ADA levels.
The PEEF Expenditure Plan included in the adopted budget amounts to $88.9 million. The spending plan for these voter-approved funds support many programs in the City’s public schools, including sports, libraries, arts, and music programs. For instance, because of PEEF, every SFUSD school has a library and a credentialed librarian, and every student has access to a nurse and/or social worker.
Additionally, the budget includes $94.9 million in revenues from parcel taxes from the Quality Teacher and Education Act (QTEA), as approved by San Francisco voters in 2008, and the Fair Wages for Educators Act (FWEA), as approved by San Francisco voters in 2020. Both measures contribute to making San Francisco teacher salaries competitive with those in surrounding school districts; provide financial incentives for teachers to work at schools with historically high turnover and teach in hard-to-fill subject areas such as high school math; increase teacher support while raising teacher accountability; improve academic innovation through research and development; and upgrade school technologies.
The approved budget also commits funds to Rainy Day and Budget Stabilization reserves. The $40 million District Rainy Day Reserve may only be drawn down in the event of an anticipated budget shortfall and is in addition to the reserve held by the City and County of San Francisco on behalf of the district. Additionally, $65 million is committed as a Budget Stabilization Reserve with the express purpose of drawing them down over time to balance the district’s budget over the following two fiscal years.
Positive S&P Rating for SFUSD
S&P Global Ratings, an American credit rating agency that publishes financial research and analysis on stocks, bonds, and commodities, has affirmed SFUSD’s long-term “AA” rating on previously issued General Obligation (GO) bonds. S&P assigned its “AA” rating, with a stable outlook, to the district’s expected $285.3 million bond funds from the 2016 bond and expected $145 million bonds.
About the Local Control Funding Formula
California’s LCFF, enacted in 2013–14, replaced the previous kindergarten through 12th grade (K–12) revenue limit funding methodology, and gave school districts serving high-needs students more funds in the form of supplemental and concentration grants, based on the number and percentages of high-needs students they serve. School districts are also required to adopt Local Control and Accountability Plans (LCAPs), which are plans to show how districts will spend the supplemental funds to support their high-needs students. Each year, parents, students, labor partners, and community members are given the opportunity to provide feedback and help shape SFUSD’s LCAP.
SFUSD must send its approved budget to the state by July 1.
Learn more about the SFUSD Budget and LCAP and view an interactive budget dashboard.