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SFUSD expects budget cuts despite funding boost in coming school year

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The San Francisco Unified School District will see continued budget cuts this year due to increasing salary and pension costs. (Jessica Christian/S.F. Examiner 2017)

For the first time in nearly a decade, the San Francisco Unified School District will see its state funding restored to pre-recession levels in the coming fiscal year, but increasing pension and salary costs mean that cutbacks will continue, according to district officials.

The district’s is expected to spend $890 million in the coming, with most of that money coming from the state’s Local Control Funding Formula, which Governor Jerry Brown has proposed to fully fund for the 2018-19 school year, increasing SFUSD’s allocation to about $522 million.

That funding, plus other federal and district revenues, will boost the district’s unrestricted general funds by some $36 million from last year, to about $600 million in the coming school year. A draft of the budget proposal was approved by the Board of Education on first reading on Tuesday, and is expected to be heard at a commmitte of the whole hearing on June 19.

Implemented in 2013, the LCFF is Brown’s education financing law, which aims to “get us back to 2007-08 funding levels for education,” said Thu Cung, SFUSD’s executive director of budget services. The LCFF was initially expected to be fully funded by 2021.

Brown’s proposed budget would also focus one-time funding on a statewide shortage of special education teachers through training and recruitment. Locally, the school district’s proposed budget would allocate about $140 million to SFUSD’s special education department — some $5 million more than last school year — with about $75 million in unrestricted funding.

Pathways to Teaching, the first district-sponsored teacher credentialing program, which launched in the 2017-2018 school year, will remain a priority and will likely see an allocation of additional funding.

According to a district spokesperson, the program drew 88 initial participants, of which at least 68 are expected to receive their credential. In 2018-2019, 90 participants are expected to enroll.

Despite the increase in state funding, growing pension and salary demands have manifested themselves in a 5 percent reduction of a combination of programs and staff positions across the district’s central office departments over the past year, and more cuts are on the horizon.

“Salaries are probably going to eat up that amount of increase as is,” said Cung.

A nine-month contract bargaining process ended last November when San Francisco educators negotiated an 11 percent pay raise over three years, plus a one-time 3 percent bonus. Revenue from Proposition G, a $298 parcel tax passed by San Francisco voters last week, will serve as an additional salary boost for educators over the next two decades and will also provide funding for supports to schools with low-performing student groups.

The upcoming salary increase is expected to cost the district over $40 million from its unrestricted funds “across many employees, not just teachers,” said Cung.

Cung said that a three-year trend of rising pensions costs is expected to continue, with retirements costs set to increase by 1.9 percent this school year and by another 1.9 percent the year after, according to Cung. In the 2014-15 school year, pension costs comprised 12.4 percent of the district’s payroll, or $51.5 million; in 2016-2017, those costs jumped to 14.2 percent, or $67.3 million.

“There is this silent recession [that] we are worried about over the next few years,” said Cung. “We are needing to make some trade-offs in what we fund and what we have to shift [money] away from.”

The central office cutbacks amounted to some $11 million over the past year and came on the heels of 3 percent cuts the year before, said Cung.

While more cuts are anticipated in 2019-2020, “We want to keep the impact of those cuts away from our school sites to the extent possible,” said Cung, who added that school site allocations have remained level over the past year.

SFUSD receives Supplemental and Concentration grants under LCFF based on its count of low-income, English learners and foster youth populations, which have been shrinking slightly, according to Cung.

“It’s been ticking down in the last three years,” she said, adding that the grants for 2018-19 are projected to total $64.5 million.


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