Board adopts positive fiscal certification and multi-year balancing plan as public protests focus on site cuts

The San Francisco Board of Education adopted the fiscal year 202122 second interim report and accompanying multi-year projections after a lengthy presentation from Chief Financial Officer Megan Wallace and extended public comment that focused on school-site budget cuts.

Wallace told the board staff are presenting a positive fiscal certification and multi-year projections that pair expenditure reductions with one-time funding sources. Staff included anticipated receipts tied to the Local Worker Employer Agreement (LWEA) litigation and the city, noting $156 million in parcel-tax-related resources overall and an expected $26.6 million this year. The district plans to allocate $40 million to a rainy-day reserve, $60 million to an OPEB investment and set aside funds for budget stabilization. Wallace said the district expects to present a balanced projection for the next two years using these one-time and ongoing sources but warned that declining enrollment and average daily attendance remain structural risks.

Public comment became a central feature of the item. Dozens of parents, teachers and community members called attention to disproportionate cuts proposed at Lowell High School (a reported 21% reduction in an initial allocation), possible reductions to counselors and literacy programs at other sites, and the broader impact of enrollment declines. Multiple speakers urged the board to prioritize direct services for students, to revisit site-based allocation rules, and to consider recovering ERAF funds held by the city. Several speakers requested $2 million in additional funding to make Lowell's cuts more equitable with other sites.

During board discussion commissioners acknowledged the difficulty of balancing structural deficits while protecting classrooms. Staff explained that the balancing plan relies in part on updated LCFF and special-education revenue projections, draws on one-time payments from the City and uses a combination of restored and reduced expenses to arrive at a $125 million balancing plan. Chief Wallace said staff modeled a range of scenarios and would aim to limit use of reserves and to recommend restoration only where prudent. Commissioners requested that staff prepare contingency planning material for schools to use if the governor's May revise produces additional state funding; staff described a process where schools would receive targets to inform planning, with final allocations adjusted in fall revise to reflect final enrollment and state action.

The board adopted the second interim report by roll call; the vote was recorded as unanimous from the members present.

Next steps: staff will present an analysis of the payroll incident and related operational lessons at the Budget & Business Services Committee on April 6; schools will receive contingency targets and staff will return with a recommended process for prioritizing restorations if May revise funds materialize.