Dear Colleagues:

I hope this message finds you well and that your summer is off to a good start. I’m reaching out to share important updates regarding the district’s budget for 2024-25 and budget development for 2025-26. As your superintendent and in the spirit of transparency, I believe it is important that you receive these updates directly from me. 

SFUSD has experienced a structural deficit for years, which happens when expenses for the year exceed revenue. Student enrollment has declined across the state and in SFUSD, and we have not reduced our staff accordingly. Overall expenses are growing much faster than our revenue sources. We continue working diligently with our State fiscal advisors, the Board of Education, and our labor partners to implement budget-balancing solutions.

On Tuesday, June 25, the Board of Education adopted the district’s $1.3 billion operating budget for the 2024-25 school year. SFUSD’s budgeted expenditures are expected to exceed revenues by $148.5 million in 2024-25. This reflects the planned deficit spending that will take place next year, for which SFUSD is intentionally drawing down certain reserves (e.g., Budget Stabilization Reserve, Systems Reserve, State Block Grants). While SFUSD’s Multi-Year Projections have planned for the use of these reserves, it is critical that we implement budget-balancing solutions that eliminate deficit spending and create sustainable financial practices.

To that end, on June 25, SFUSD also presented an updated Fiscal Stabilization Plan for the 2025-26 school year to further reduce deficit spending. The stabilization plan will be finalized by December 2024, at the earliest, and changes will not go into effect until the 2025-26 school year. However, we want our community to understand the magnitude of changes that will occur.

What is happening?

When we adopted the 2023-24 budget last summer, we identified a list of expenses for which SFUSD had funding for two additional years – through 2024-25. We acknowledged that these expenses would be eliminated by 2025-26 if no further funding was identified. In addition, this year, we decided to invest in our educators and schools by giving historic raises. Now, the time has come to implement the reductions we identified last year and identify further reductions to eliminate deficit spending. We are committed to going through a thoughtful, cross-departmental process to ensure any reductions are made with students and schools in mind.

What does this mean for the future? 

The district’s Fiscal Stabilization Plan identifies an initial list of reductions for the 2025-26 school year, including reductions to personnel. The vast majority of SFUSD’s expenses – approximately 80% – are employee payroll, benefits, and pensions. While we have been doing all we can to avoid layoffs, the unfortunate reality is that to meet our fiscal obligations, we must reduce our existing workforce by approximately 8%. This reduction in our workforce also brings the district closer to alignment with the 10% enrollment decline we have experienced in recent years.

What does this mean for right now?

While our long-term plan will evolve in the short term we are making immediate decisions about this coming year's budget and staffing. We are doing this because any reductions we make now will help mitigate future cuts and layoffs. This means that all hiring for vacant positions – no matter the funding source – are subject to review and approval by our CDE Advisors before proceeding. We will communicate directly with any schools or departments that are impacted by budget or staffing changes.

Again, I want to emphasize that the details of our Fiscal Stabilization Plan will be finalized over the coming year, particularly as we engage in the creation of a new portfolio of schools for 2025-26. We are also monitoring the state budget to account for any changes that may impact our school district. While this is challenging, we want our community to understand that by making these reductions, we are putting SFUSD on the path to long-term fiscal solvency and ultimately positioning San Francisco to create the best possible learning environments for students.

Please know that your hard work and dedication to the students and families of San Francisco is greatly appreciated. Thank you for everything you do, and I wish you a wonderful summer.

In community,

Dr. Wayne