May 9, 2024 - News

San Francisco's school district is facing a budget crisis

School bus with money

Illustration: Rebecca Zisser/Axios

San Francisco's public school district is in financial trouble and no longer has full control over its spending after California's superintendent of public instruction recently outsourced the power to suspend or reverse financial decisions, per the school district.

Why it matters: To address a $420 million budget deficit next year, the San Francisco Unified School District will need to lay off more than 300 employees by the end of the month and implement its school closure plan, the San Francisco Examiner reports.

State of play: San Francisco's school board held a special meeting Tuesday alongside state advisers and other financial experts to discuss a state audit and risk analysis report outlining the school district's dire financial situation.

  • The meeting came shortly after the state's education department gave veto power to two state fiscal advisers due to concerns that SFUSD could run out of money by 2025. SFUSD, however, is "nowhere close" to a full state takeover, auditors said.
  • The audit found that the financial consequences surrounding its faulty payroll system, inadequate staff training and declining enrollment contributed to the district's problems.

What they're saying: "It would be an understatement to say things are not OK," Michael Fine, CEO of the fiscal crisis and management assistant team, told the school board at the meeting.

  • School board president Lainie Motamedi said the state report was "a wake-up call," but that the board is now "in a position where we could at least see the dots that need to connect."
  • Motamedi had previously said the budget deficit had been "years in the making."

Between the lines: The school district this month announced it's preparing a $790 million bond ballot measure for November's election to go toward repairing its facilities.

  • But SFUSD officials say that even if voters approve the bond, more money — to the tune of $6 billion — would be needed to address all the schools that need repair, the San Francisco Examiner reports.

What's next: The school district's new sub-committee, tasked with advising the board on addressing these financial concerns with the state, meets next week.

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