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Board certifies "qualified" 2nd interim budget and adopts a two-page fiscal stabilization plan to reduce deficits
Summary
Staff recommended and the board approved a 'qualified' 2nd interim certification after a presentation showing restricted-side deficits growing to roughly $126M by 2028–29; staff proposed shifting eligible expenses to restricted funds, central office reductions, and $14M in additional savings to address multi-year shortfalls.
The San Francisco Board of Education adopted a qualified certification for its 2025–26 2nd interim report and heard a fiscal stabilization plan (FSP) intended to contain multi-year deficits.
Budget staff explained the district moved eligible expenses to restricted funds and captured vacancy savings, improving the unrestricted presentation but shifting significant future liabilities to the restricted side. Staff presented multi-year projections showing restricted-side deficits of about $67 million in 2026–27, nearly $96 million in 2027–28 and roughly $126 million projected in 2028–29 (which will be the district’s new 3rd year for budget adoption). Staff described steps already underway — $17 million moved from unrestricted to restricted and $15.264 million in central-office reductions — and proposed two additional FSP measures (aligning special-education contractors to vacant positions to save $6 million and further central-office reductions of $8 million) totaling about $14 million more in savings.
Commissioners pressed staff on the assumptions, contract spending, projected increases in services and how the district will convert contracted special-education services into district employees; staff said reconciling contracts and strengthening HR processes are priorities and that additional FSP measures will be proposed at budget adoption. The board voted to approve the 2nd interim report and the accompanying FSP.
