The San Francisco school budget crisis is solvable

District needs an actionable, strategic plan with multiyear projections

By Elizabeth Kelly

Special to The Examiner

The San Francisco Unified School District is facing a massive fiscal crisis — a structural deficit of over $125 million per year and the lowest amount of reserves allowable by law. Pension and post-retirement costs are ballooning and now exceed $1.8 billion in unfunded liability. The district has been hit with a 6.4% decline in enrollment since the beginning of the pandemic, and enrollment is projected to decline by another 10% by 2030.

In order to submit its balancing plan by Dec. 15 to the state, the district has proposed $90 million in spending cuts and $35 million by using one-time funds it will receive and deficit spending. Approximately 415 teachers, paraprofessionals and staff at school sites will be laid off. This is going to impact our children’s education and the wellbeing of teachers and staff.

San Francisco’s crisis in education is not unique to the state or the country. California ranks 39th in the nation in education funding when you adjust for the cost of living (and note, San Francisco is the second most expensive U.S. city after New York City). Public agencies across California are facing pension crises.

At the same time, the San Francisco Board of Education has been derelict in its duty to prudently manage its funds. SFUSD has been deficit spending since 2017 and has failed to address its structural deficit. The district has also been failing our students by using outdated and debunked curricula, including in math and reading. This is leading to poor student outcomes, particularly in our most vulnerable communities.

But this is a solvable crisis and a crisis worth solving. How do we do it?

First, address the problem head on. Now is not the time for pointing fingers. It’s time to come to the table together to solve this holistically. This means bringing families, district staff, the unions and the community together. There are heavy burdens we need to share — these cannot be borne by any one group or interest alone.

Second, look at the big picture. We can’t just solve for the year ahead. We need to solve for the future declines in enrollment over the next decade. This will mean school closures. It will also mean right-sizing the district administration. The district needs to look at multi-year projections and create a strategic plan for the future.

Third, we need to solve for the unfunded pension and retirement benefits. Pension and retirement benefits are not protected under Chapter 9 bankruptcy. If the Board of Education fails to address the deficit, the state can step in and appoint an administrator who, by California state law, has the power to file for Chapter 9. We need to protect our former teachers as well as our current teachers. These costs cannot be borne solely by future teachers. One-time funds should be used to “buy down” this liability by funding the district’s health care trust fund and put into reserves to bring our district back to fiscal sustainability. Ongoing funds should be used for current operations, including funding our schools. We should also start transitioning to a defined contribution model — similar to a 401(k) with a generous employer contribution — with employees also paying into Social Security. This approach will reduce future liabilities and support our district’s employees.

Fourth, we need to align our curriculum and instructional investments with evidence-based practices like phonics for early childhood literacy. We also need to stop preventing universally accepted practices like allowing acceleration in secondary math grades. Early and effective investments in our students create long-term benefits and reduce the need for later, more costly interventions. This also lets our children reach their full potential whether they need extra support or accelerated learning opportunities.

Fifth, we need an excellent superintendent to lead the district. The district has already started the search process and we need someone with a vision for the district. The superintendent will need to be an excellent communicator with the board of education, unions, families and the community. The new superintendent needs to be adept at setting strategic priorities.

The superintendent will also need a strong hand to address mismanagement and dysfunction at the district level. This arises again and again. One example of dysfunction is the ongoing facilities issues at Buena Vista Horace Mann, where students see rats scurrying across their classroom floors, falling ceiling tiles and uncovered electrical outlets.

Sixth, we need to plan our facilities investments to ensure healthy, safe and quality facilities for our students. We need to strategically invest in refurbishing older schools, plan for building new schools as appropriate and start an effective capital management plan to begin selling, leasing and otherwise utilizing the district’s massive portfolio of unused facilities. The district needs to optimize the revenue streams transparently and legally at its disposal. This includes the considerable real estate holdings of the district — 157 facilities that could serve a student population twice the size of the current enrollment.

Seventh, we need to increase investment in our schools. But we should make these investments only when the district has put its house in order.

Meanwhile, as the house has been burning, the Board of Education has been grandstanding, pointlessly litigating and digging a deeper financial hole with its deficit spending. The district supervisor has allowed internal fiefdoms and dysfunction to perpetuate. The public has been left in the dark with Brown Act violations and the district sidestepping oversight requirements. These are all abuses of the public trust and of public funds.

As a parent, public school true believer, former public servant and former board chair, I can say unequivocally that we deserve better than this morass. At the same time, there is hope for the future. The district is full of amazing educators, school site staff and public servants. I have seen firsthand the dedication of teachers, special education staff and beyond.

We need to hold the district accountable. We also need to champion what is right about our district. Every child in San Francisco deserves a quality public education. That is our North Star. We just need to follow it.

Elizabeth Kelly is an attorney with extensive public agency law experience, having served as general counsel at MCE Clean Energy, a California joint powers authority. She previously served as chairwoman of the board of the Friends of the San Francisco Public Library; she is the mother of two children, including a second grader in the San Francisco Unified School District. Twitter: @BethKellySF

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