SFUSD board approves positive certification for second interim budget amid warnings of future deficits

The San Francisco Unified School District board voted to approve a positive certification of its second interim budget report on March 14, signaling that district and county leadership believe they can meet their financial obligations for the current year while warning of structural deficits in later years. The board approved the certification on a roll-call vote recorded as six ayes.

Superintendent Wayne and Interim Head Financial Officer Anne Marie Gordon presented the second interim report, saying the district has submitted quarterly payroll reports to the Employment Development Department and expects processing by the 17th. Gordon told the board the second interim now fully reflects payroll expenditures that were previously unposted and that the district used an updated LCFF calculator from FCMAT to refine revenue estimates.

The report also incorporated a $20,000,000 audit adjustment to create a systems reserve, in addition to a previously established $65,000,000 budget stabilization reserve; board materials show the stabilization amount is projected to decline to roughly $11,000,000 under current assumptions. Gordon cautioned that while the near‑term certification is positive, multi‑year projections still show deficit spending in later years and staff recommended developing budget‑balancing solutions soon.

Elliot Dushon, the CDE representative in the room, counseled a focus on position control and standard operating procedures and said some corrective items will take longer than the June adoption timeline to resolve. Dushon told the board the district has made progress but that demographic and position‑control work will take many months to fully inform staffing decisions.

Public commenters sharply criticized the district’s payroll failures and called for stronger action. Steve Zeltzer said the district’s handling of its payroll and vendor contracts demonstrated “negligence” and urged an end to privatization; another caller urged a state takeover. The board acknowledged the public anger and emphasized the need to earn back trust through clearer reporting.

Board members pressed staff for clearer delineation of county office versus district costs, for sunset dates to be displayed alongside one‑time and restricted funding sources, and for ongoing communication about progress on the fiscal health risk analysis. Commissioner Alexander said he would not vote to approve future budgets without being persuaded they align with the district’s stated goals; other commissioners said they supported the certification while urging regular, mid‑development updates.

The board directed staff to carry forward a resolution committing to align expenditures with revenues as part of the 2023‑24 recommended budget and to continue providing CDE with requested responses. The second interim certification is procedural: it reports current forecasts to the California Department of Education and does not by itself constitute final budget adoption. The board is expected to continue budget deliberations and to consider the recommended budget and related resolutions ahead of the June adoption deadline.