Schools are closed for the rest of this school year, but the shutdown has created unexpected expenses for the San Francisco Unified School District. (Kevin N. Hume/S.F. Examiner)

Coronavirus could cost San Francisco schools up to $18.9 million this year

New projections show deficit for current fiscal year could reach up to $41.5 million

Revenue losses stemming from the coronavirus pandemic could cost San Francisco public schools up to $18.9 million, nearly doubling the current year’s expected budget deficit, district officials said Wednesday.

The San Francisco Unified School District is planning for a worst-case scenario of a total $41.5 million budget deficit for the current fiscal year, which ends in June. Some costs, like utilities for now-shuttered schools, could decrease, but the district has begun looking at ways to cut costs.

“We’ve all been wondering what are the economic impacts of this,” said Meghan Wallace, SFUSD chief financial officer at a virtual budget committee meeting Wednesday. “A lot of our assumptions have been upended because of this forecast.”

The budget was already going to be tough to balance, with a deficit projected at $22.6 million for the current fiscal year and at $57.2 million for the 2020-2021 fiscal year. Officials attributed the deficit to decreasing state funds as personnel costs crept up.

With the coronavirus-related impacts, however, the operating deficit for the coming year could rise to $82.2 million. Much of the anticipated revenue loss comes from the loss of city sales tax revenue and interest earnings that would reduce the funds available from the voter-approved Public Education Enrichment Fund and from the Department of Children, Youth and their Families, Wallace said.

SFUSD has contended with unforeseen expenses in this current fiscal year including the need to provide technology and internet connections to students, increased pay for frontline workers, meal distribution, and distance learning during the coronavirus school closures. On Monday, San Francisco and five other Bay Area districts formally closed schools for the remainder of the academic year.

State and federal funding will provide some short-term assistance. Gov. Gavin Newsom signed Senate Bill 117 in March to keep local schools funded during a shutdown; that bill designated $878,000 for San Francisco schools, while $9-10 million is expected from the record $2 trillion federal stimulus package.

The district has also received about $4.5 million in donations, though the contributions are slowing down, and is seeking more assistance from a second federal stimulus.

“The good news is that we do see some new funding sources,” said Myong Leigh, SFUSD’s deputy superintendent of policy and operations. “We do expect to see a reduction or slowdown in expenses for the current year.”

Of the $26 million in cuts ordered for the 2020-2021 school year, $10 million was expected to come out of school sites. District officials warned educators in February that layoffs — the first since 2012 — were likely, prompting calls for a teacher strike with a demand to restore funds.

Now the central office will bear the brunt of the $26 million in cuts, but more could come as The City assesses the “stark and immediate” economic damage during the budget process.

“The cautionary tale there is that some positions at [school] sites are centrally funded,” said Susan Solomon, president of the United Educators of San Francisco. “One of our tasks is to figure out who that is.”

California is also contending with a potential $50 billion revenue loss over two years, as forecasts in January projected a moderate recession weeks before coronavirus arrived, but clarity on state funding is still some weeks away as the Legislature has extended its recess to May 4.

The Board of Education is expected to discuss an interim budget report for the 2019-2020 school year at its next regular meeting.

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