Board of Supervisors Approves Plan to Forgive $26 Million Loan to San Francisco School District
Loan originally made in 2019 helped cover educator wages during litigation will be forgiven as part of long-term financial stabilization plan
San Francisco, CA — The Board of Supervisors voted today to approve a plan introduced by Mayor London N. Breed and Supervisor Hillary Ronen 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 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, SFUSD continued to pay the increases, with support in part from the $26.6 million advance from the City and County that would be repaid to the City upon favorable resolution of Proposition G. In November 2021, the courts ruled in favor of SFUSD on Proposition G, allowing the City to repay itself since SFUSD was provided access to the frozen funds.
However, given that SFUSD is facing a $125 million budget shortfall for Fiscal Year 2023-24, the Mayor introduced legislation in November 2021, foregoing the full $26.6 million repayment upon SFUSD’s adoption of a comprehensive multi-year plan to stabilize SFUSD finances and operations and a budget for the coming fiscal year. On December 14, 2021, the Board of Education adopted a budget balancing plan that aims to stabilize SFUSD’s budget and address ongoing structural deficits. The Board of Education now must adopt a balanced budget that conforms to that plan, and the California Department of Education must certify that this condition has been met, in order for the loan to be forgiven.
“Our public schools are in a tough spot right now, and there’s a lot of work that needs to be done. Forgiving this loan is not only the right thing to do but it is absolutely necessary as the School District struggles with a significant budget deficit,” said Mayor Breed. “Our students, educators, and families have had to endure so much over the past few years, and we will continue to work as a City to help the School District get moving in a positive direction to better support our kids.”
“Our public schools are chronically underfunded, right here in San Francisco and throughout the State. It is one of the great embarrassments of California. 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, and leadership from the District.
I am hopeful that the City, the Board of Education, and the District can work together moving forward to support our students, educators, and families and we can all focus on putting student wellbeing at the center of our decisions,” said Supervisor Hillary Ronen.