At least one close observer of San Francisco’s public schools thinks there may be a silver lining in the district’s budget crisis.
It could amount to roughly $40 to $60 million of overstated projected expenses, which, given San Francisco Unified School District’s myriad financial problems and $1.3 billion budget this year, isn’t much help. At the same time, a troubled district will take what it can get.
For almost a year now, teachers and families have been hammered with repeated warnings that SFUSD, without a major course correction, is headed for insolvency, and in turn require draconian cost-cutting under a dreaded state takeover revoking local control of the city’s schools.
In response, district Superintendent Dr. Maria Su, who took over in October, jumped into action, implementing potential layoffs of more than 850 teachers and administrators to close what she says is a projected $114 million budget deficit for the next school year.
Teachers, parents and union leaders are preparing for an update about the layoffs and the budget at a Board of Education meeting Tuesday night. Jeff Lucas will likely be there. A former SFUSD parent and a devoted attendee of the gatherings, he has spent years immersing himself in the district’s labyrinthine finances. And thinks he may have detected an accounting error that reveals a slightly less gloomy picture.
“Everyone talks about the financial crisis, and I feel the fear,” Lucas said. “But I think we’re in a management crisis, not necessarily a financial crisis.”
Lucas believes SFUSD’s budget for next school year reflects payments to its classified staff over summer months and school breaks when, because they’re mostly hourly workers, they don’t get paid. The employees include clerks, community coordinators, campus security aides, family liaisons, noon monitors, and teachers’ assistants. Lucas has calculated the payments to be between $40 million and $60 million.
“If the district is able to cut the budget by tens of millions of dollars just by adjusting it, that should significantly reduce the pressure on the need for layoffs,” Lucas said. It gives the district “some time to figure this out.”
Elliott Duchon, the state-appointed monitor who has veto power over SFUSD’s expenditures, declined to comment on Lucas’s hypothesis, saying it’s based on “assumptions that I can’t validate.” He referred the inquiry to SFUSD. The district, which now requires questions to be channelled through a general email address, didn’t respond to a request for comment.
Officially, the bad news about SFUSD’s condition continues to flow. The district released an updated report Friday giving itself a negative financial rating, the upshot being it’s projected to run out of cash by June 2026.
Duchon told Gazetteer the rating can only be reversed down the road. SFUSD has to “go through the layoff list, and budget cuts, and the fiscal stabilization plan,” he said. “They all have to be put into place to really change the budget for the following three years.”
“The district needs to follow through with the planned budget cuts,” he added.
If the district suffers from a significant forecasting error, it won’t be the first time, Lucas said. A former U.S. Navy lieutenant with a background in accounting and finance, he took an interest in SFUSD’s budget when it was suffering similar woes in 2022. In 2023, when SFUSD finalized its expenses for the 2022 to 2023 school year, it concluded it spent $70 million less than it originally projected, he said.
Another audited report published in February — and disclosed last week for Tuesday’s meeting — showed SFUSD’s forecasted deficit of $77 million for 2023 to 2024 was instead a surplus of about $49 million, according to Lucas.
At Tuesday’s meeting, Dr. Su is expected to explain the district’s budgetary projections for the remainder of this year and next. Lucas remains skeptical. He doesn’t wholly discount the need for some layoffs, and noted that SFUSD clearly needs to gain “position control,” or a full understanding of what types of teachers and staff are placed where. But doubts about the district’s handle on its finances linger.
“Is she making progress toward understanding what's really happening?” Lucas said. “No, I don't see that. All I see is the march towards cutting $113.8 million from the budget.”
Correction: This story was updated at 10:20 p.m. on March 10, 2025 to correct the description of the entity that issued SFUSD's recent negative rating. It was the district itself, not the state agency FCMAT.
