Budget FAQs - Budget Development for 2025-26

SFUSD Superintendent Dr. Maria Su and district leadership presented the fiscal stabilization plan, which details how the district will identify and implement solutions to resolve its ongoing deficit, and the First Interim Report for the 2024-25 adopted budget which covers a review of the financials from July 1 through Oct. 31, 2024.

The Fiscal Stabilization Plan outlines SFUSD’s efforts to staff schools and deliver educational services and programs to support student success in alignment with the Vision, Values, Goals, and Guardrails (VVGG).

As part of its budgetary next steps, SFUSD is committed to:

1) Developing a school staffing model aligned with SFUSD’s goals and guardrails.
2) Minimize impacts to schools by reducing Central Office staff and implementing operational improvements.
3) Restructuring districtwide services to serve students and schools more effectively and efficiently.
4) Providing consistency and predictability in budget planning for schools and departments.
5) Actively addressing operational challenges identified by the Financial Crisis Management and Assistance Team (“FCMAT”) review last Spring 2024

In May 2024, the California Department of Education (CDE) issued a negative certification of our budget report and increased state oversight. In response, the district is required to submit a plan showing how to balance our budget by the end of the 2025-26 school year. This plan includes $113M in reductions for 2025-26, including eliminating approximately 500 positions from the district. If we do not follow through on making these reductions, a state takeover is possible. We need to do everything we can to maintain local control. 

The California Department of Education (CDE) has determined that SFUSD will be unable to meet its financial obligations over the next two years.

The California Department of Education (CDE)-appointed fiscal advisors currently can engage directly in any district operation deemed counter to fiscal stability. If SFUSD does not balance its budget, the CDE may assume more control regarding the district’s decisions, leading to less input from the Board of Education, district leadership, and the local community. 

If SFUSD fails to address its financial challenges adequately, our school district will fall into state receivership. This means that the state of California will take over the district’s governance and its financial, operational, and programmatic decisions for years to come. This would strip families and school site communities of their voice and their ability to shape their children’s educational experiences. It will further deplete resources directed to our schools, erode our collective decision-making power, and likely compound educational disparities for our most vulnerable students.

We have taken serious corrective action to get closer to balancing our budget, including reducing central office staff; eliminating hundreds of vacant positions; reducing rentals, leases, repairs, and non-capital expenditures; and reducing costs for materials and supplies, contractors, and conferences. We are also in the process of changing how we staff our schools.

As part of its budgetary next steps of the fiscal stabilization plan, SFUSD is committed to:

1) Developing a school staffing model aligned with SFUSD’s goals and guardrails.
2) Minimize impacts to schools by reducing Central Office staff and implementing operational improvements.
3) Restructuring districtwide services to serve students and schools more effectively and efficiently.
4) Providing consistency and predictability in budget planning for schools and departments.

SFUSD spends about 80% of our $1.3 billion budget on employees. 

We are doing all that we can to avoid layoffs, including offering retirement incentives, monitoring resignations, and closing some vacant positions. However, the unfortunate reality is that in order to meet our fiscal obligations, it will be necessary to reduce our existing workforce.

The majority of our staff work directly with students in schools. Given the size of our structural deficit, it is inevitable that there may be layoffs to those who work with students in addition to those who are in supporting roles outside of classrooms.

In 2023, SFUSD and the United Educators of San Francisco (UESF) reached a historic agreement that included a $9,000 salary increase for teachers in the 2023-2024 school year. Teachers also receive an additional 5% raise for the 2024-2025 school year. Also in 2023, SFUSD reached an agreement with Service Employees International Union (SEIU) Local 1021 for a 6% salary increase for 2022-23 and a 10% salary increase for 2023-24. 

Districts are funded by enrollment and get a certain amount of money per student. As our enrollment goes down, we receive less revenue. Our enrollment has declined by 4,000 students over the past seven years. This means the district receives approximately $80 million less in revenue than it would if it were still fully enrolled. Yet the district has not adjusted our expenditures or the number of schools we have to reflect this decline in enrollment. 

SFUSD has engaged in marketing and outreach efforts to recruit students, including traditional and digital marketing initiatives and engagement with the community through community-based organizations (CBOs), community workshops, and the annual enrollment fair. In addition to these outreach and marketing efforts, beginning with enrollment for the 2025-26 school year, SFUSD has made the enrollment process simplier for families where applicants only need to apply once and have the ability to be placed on several schools' waitlists.