San Francisco (December 5, 2025) - The San Francisco Board of Education and San Francisco Unified School District (SFUSD) Superintendent Dr. Maria Su are pleased to announce that after intensive work to stabilize its finances, SFUSD is on track to reach a critical benchmark in its plan to exit state oversight and fully restore local control.
As a result of responsible decision-making and strengthened financial practices, SFUSD will submit a “qualified” budget in early December—an important milestone that accelerates the district’s efforts toward positive certification by March 2026. To continue this progress and reach positive certification, SFUSD still must continue to make budget cuts for next school year and avoid any significant cost escalations.
This progress will be presented during the First Interim Report at the Tuesday, Dec. 9 Board of Education meeting. Interim reports are budget updates similar to a business quarterly report, and as part of that report the Multi-Year Projection determines a district’s progress on certification.
“This is the result of disciplined choices and strong financial management,” Superintendent Dr. Maria Su said. “Our fiscal stabilization efforts are working, and we must stay the course to maintain this progress. I’m optimistic about where we’re headed as a school district and profoundly appreciative of the community’s support as we shape a stronger future for public education in San Francisco.”
Certification Definitions
- Positive Certification: The District or County Office will meet its financial obligations for the current and next two school years.
- Qualified Certification: The District or County Office may or may not be able to meet its financial obligations for the current and next two school years.
- Negative Certification: The District or County Office will not be able to meet its financial obligations for the current and next two school years.
While the district has made significant strides, including $114 million in cuts to the 2025-26 school year budget, closing the remaining deficit remains essential. Avoiding cost escalations—including reaching sustainable labor agreements—is critical to protecting both the workforce and the district’s long-term financial health. The upcoming budget cycle will still require hard decisions and difficult conversations.
Even with these challenges, students, families, and schools are benefiting from a district moving in the right direction. Reaching qualified status is a required step on the path to positive certification. If SFUSD continues on its current trajectory, the district is striving to achieve positive certification when it presents its second interim budget in March, marking the final step toward exiting state oversight and fully regaining local control.
“This negative to qualified certification of our budget reflects a significant step towards regaining local control of our finances, and is a testament to the significant progress we have made over the last year to stabilize our district,” Board of Education President Phil Kim said. “The Board remains firmly committed to adopting a budget that aligns with our student outcome goals and keeps student success at the center of every decision. We deeply appreciate the partnership of our community as we continue rebuilding trust and strengthening confidence in San Francisco’s public schools.”
SFUSD’s recent budget monitoring and fiscal management efforts have identified meaningful savings and efficiencies. These improvements include maximizing the use of restricted resources, including the Learning Recovery Emergency Block Grant and local funds, to provide relief to the general fund; identifying and removing duplicate and vacant positions from the budget; and strengthening budget controls related to projected compensation for both vacant and filled positions.
Despite this progress, SFUSD continues to face structural planned deficits in its Unrestricted General Fund, which leads to a projected negative fund balance over time. The deficit is driven by planned annual expenditures exceeding projected annual revenues across the current and next two fiscal years. In its First Interim report, the district anticipates shortfalls in the unrestricted general fund of $51 million in 2025-26, $32 million in 2026-27, and $19 million in 2027-28 if no additional adjustments are made.
Budget Stabilization Background
In 2021, the California Department of Education (CDE) appointed two state fiscal experts to support the district in fiscal stabilization. In May 2024, SFUSD received notice from the CDE that it revised the certification of SFUSD’s budget report from “Qualified” to “Negative.” With this updated certification, the fiscal experts moved to fiscal advisor status and can directly engage in any district operation deemed counter to fiscal stability.
Next Steps
SFUSD is committed to transparency in its budget planning process. In fall 2025, Superintendent Su held a series of town halls to engage the community in budget development for the 2026-27 school year. SFUSD will present its First Interim Report at the Dec. 9 Board of Education meeting. At the Dec. 16 Board meeting, SFUSD will share its updated Fiscal Stabilization Plan. In January 2026, the Governor’s proposed budget for fiscal year 2027 is expected to be released.
Also in January, schools will receive their budget allocations and engage with their School Site Councils on planning and development for next school year. SFUSD presents its Second Interim Report and updated Fiscal Stabilization Plan in March 2026, followed by the adoption of the 2026-27 budget and Fiscal Stabilization Plan in June 2026.
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