SFUSD Will Receive One-Time $123 Million After Lawsuit Challenging Voter-Approved Prop. G Measure Fails

San Francisco (November 17, 2021) - The San Francisco Unified School District (SFUSD) will receive funds from the Proposition G-Living Wages for Educators Act parcel tax, which was passed by San Francisco voters in 2018. Funds from the parcel tax have been withheld from SFUSD pending the outcome of a lawsuit challenging the voter-supported initiative, and the district is now set to receive $123.4 million.

“This ruling is a huge victory for San Francisco public schools and represents the will of the voters of San Francisco,” Superintendent Dr. Vincent Matthews said. “We will continue to work with our community to determine next steps in balancing our budget and ensuring these funds are used for their intended purposes.”

“When the majority of San Francisco voters approved Proposition G in 2018 and its replacement Proposition J in 2020, they showed their support for our public schools,” SF Board of Education President Gabriela Lopez said. “I recognize the relief we are all feeling over this news. And with the transparent process we are going through to stabilize our budget, in partnership with our communities, I am confident our school district’s spending patterns will reflect our priorities of being student-centered and learning-focused.”

Due to the lawsuit in opposition to the Prop. G parcel tax, $50 million was withheld from SFUSD annually over a period of three years, totalling $150 million. Rather than halt salary increases promised under Prop. G, the district reduced planned expenditures to $40 million per year and funded the $120 million total expenses over three years with a $26.6 million loan from the City and $93.4 million from the district’s Rainy Day Reserve. 

The California Supreme Court declined to consider an appeal of two prior court decisions affirming the validity of Prop. G, providing final resolution of the litigation.

Now that the Prop. G lawsuit has failed and $150 million is set to be released, $26.6 million will be repaid to the City, with the remaining $123.4 million to be released to the district. 

Of the district’s funds, $40 million is committed to be returned to the Rainy Day Reserve, $30.0 million will be available for eligible uses under LWEA, and $53.5 million will be available for the district to determine other best uses. The ruling comes as SFUSD faces deficits of at least $125 million for the district’s next fiscal year, 2022-23.

Prop. G was a $298 per parcel tax that adjusts with inflation each year. The large majority of these funds are being used to further raise teacher salaries. San Francisco charter schools also receive funds directly from Prop. G.  

Given the uncertainty of Prop. G while it was being litigated, Mayor London Breed placed Proposition J on the ballot to replace Prop. G. Prop. J passed in 2020 and is now funding salary increases through fiscal year 2037-38.

In addition to teacher salary increases, proceeds from Prop. J, which now supersedes Prop. G as of fiscal year 2021-22, are being used to:

• Improve and maintain academic programs in reading, writing, math, science and technology
• Raise the salaries of other educators such as paraeducators
• Support professional development for all staff
• Provide innovative programs at schools with the greatest challenges

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