San Francisco, CA — Mayor London N. Breed and Supervisor Hillary Ronen today announced a plan to forgive a $26.6 million loan made to the San Francisco Unified School District (SFUSD). The loan was made in 2019 by the City at the Mayor’s direction to advance funds for the Proposition G Living Wages for Educators Act (LWEA) parcel tax, which was under litigation at the time.

Due to pending litigation on Proposition G, approximately $150 million has been withheld from SFUSD over the course of the last three years. Rather than halt salary increases promised under LWEA, the District continued to pay the increases, with support in part from a $26.6 million loan from the City and County that would be repaid to the City upon favorable resolution of Proposition G. On Wednesday, the Courts ruled in favor of the School District on Proposition G, and therefore the City is now able to collect on that loan since the District will have access to the frozen funds. 

However, given the fact the District is currently facing a $125 million budget shortfall for the upcoming fiscal year that will continue to deepen due to ongoing structural budget challenges, the Mayor and Supervisor Ronen are moving forward with a plan to forgive the loan. The California Department of Education (CDE) has taken steps to monitor the District’s financial condition including assignment of a fiscal expert to provide technical assistance and advice to the Board of Education and SFUSD administration. Rather than collecting the loan, the Mayor will introduce legislation forgiving the full $26.6 million upon the adoption of a comprehensive multi-year plan to stabilize the district’s finances and operations and a budget for the coming fiscal year that begins to implement that plan.

“Our schools are facing an uncertain and dire fiscal future, so forgiving this loan is the right thing for the City to do to support our kids and our families,” said Mayor London Breed. “Tying the forgiveness of these loans to the execution of a comprehensive plan will ensure that these critical dollars are part of a long-term effort to stabilize our District and our schools. We will continue to do what we can to support the School District and help get them on the path to success.”

“Our public schools are chronically underfunded, right here in San Francisco and throughout the State. It is one of the great embarrassments of California,” said Supervisor Ronen. “Our City government has stepped up time and time again to support our public school, students, and educators. We will continue to do so but also expect additional support from the State. We also need School District leaders to focus on its core duties, putting student wellbeing at the center of all financial decisions.”

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