4/3/2024 Budget Explainer, Updated

In March 2024, SFUSD provided an update on its budget crisis. Here is what parents need to know:

1. This School Year 2023-24, SFUSD has a budget deficit of $88 million
2. To cover this budget deficit, SFUSD has done two things:
   1. Tapping into its “piggy bank” (or fund balance) to pay its bills
   2. Conducting a Resource Alignment Initiative (RAI) to reduce its spending (what SFUSD calls “aligning resources to goals”). 

SFUSD’s budget crisis extends beyond School Year 2023-24. SFUSD may or may not be able to meet its financial obligations in School Year 2024-25, SY 2025-26, SY 2026-27, and beyond. SFUSD could run out of money in the next 3 to 5 years.

3. SFUSD may not be able to meet its financial obligations if the RAI doesn’t sufficiently reduce SFUSD’s spending, which consists of personnel costs, fixed costs, and program costs.
   1. Personnel costs include pay and benefits for employees at school sites and Central Office
      1. SFUSD and UESF (the teachers’ union) agreed to a $9,000 salary increase for teachers in SY 2023-24 and an additional raise of 5% in 2024-25. Despite this salary increase, it is hard to recruit and retain teachers to work at SFUSD, with many nearby districts paying higher salaries
      2. The RAI seeks to reduce personnel costs by implementing a Staffing Model for school sites and reorganizing the Central Office. This may result in fewer employees in SFUSD overall
   2. Fixed costs include costs to operate and maintain buildings and maintenance
      1. The RAI seeks to reduce fixed costs by generating revenue from selling or leasing properties it owns
      2. The RAI also seeks to reduce fixed costs by reducing the number of schools that it operates through consolidations or closures. Many of SFUSD’s schools are “small” (meaning they have fewer students per teacher) and “underutilized” (meaning they have more classrooms than are being used)
   3. Program costs include educational materials and supplies, contractors and consultants
      1. SFUSD will be slightly increasing its program costs because it is adopting new curriculum for English Language Arts and Mathematics
      2. The RAI seeks to reduce ongoing operating costs by prioritizing programs that have demonstrated success with student outcomes, and ending other programs
4. SFUSD may or may not be able to meet its financial obligations if student enrollment continues to decline.
   1. Student enrollment could increase as Transitional Kindergarten (TK) expands across SFUSD
   2. Student enrollment could increase as students are assigned their top-choice schools on their enrollment applications
   3. Student enrollment could continue to decline from factors such as families moving out of S.F. due to high cost of living, negative perception of SFUSD and positive perception of private or home schooling
5. SFUSD may or may not be able to meet its financial obligations if it doesn’t significantly increase alternative sources of funding, such as grants and donations.
6. SFUSD may or may not be able to meet its financial obligations if it runs out of money in its fund balance.

If SFUSD can’t meet its financial obligations, then:

7. The State of California provides a loan to SFUSD to pay bills. SFUSD would have to repay the borrowed money, with interest.
8. A state-appointed Administrator would take over running SFUSD. The Administrator (not the SFUSD Superintendent or Board of Education) would identify budget cuts to secure funds to repay the loan.
9. Only after the Administrator has determined that SFUSD has been fiscally stabilized—which can take a decade—then parents and the local community would regain local control of SFUSD.

Parents are understandably concerned about what SFUSD’s budget crisis means for teaching and learning. The most important thing parents can do now is to get involved in the RAI process:

10. Attend upcoming RAI community sessions
11. Complete the RAI survey
12. Ask questions or submit comments to SFUSD about the RAI:
    1. Online request form: Go to familylink.sfusd.edu – Add Resource Alignment Initiative to the subject line. 
    2. Email request to: [email protected] –  Add Resource Alignment Initiative to the subject line. 
    3. Call: (415) 340-1716 – Be sure to mention the Resource Alignment Initiative when you call! Phone lines are open Monday through Friday from 9am-12pm and 1-3pm. Leave a voicemail 24/7.
13. Get involved with SF Parent Coalition, which is actively advocating around this issue to ensure that negative impacts to students are minimized and that family voices are heard as SFUSD tackles its budget challenges. >> www.sfparents.org/join-the-network/