S.F. Schools’ Enrollment Declines Could Cost the District $35M

Falling enrollment at San Francisco Unified School District (SFUSD) is poised to exacerbate the district’s budget woes, according to new estimates released on Monday.

There were 49,435 students enrolled at San Francisco public schools at the beginning of this school year, according to a state-mandated annual data collection called the California Basic Educational Data System. That reflects a 6.6% decline since fall 2019 and a 4.7% decline since last year, and may trigger a commensurate drop in state funding as the district faces a protracted fiscal crisis. 

SFUSD could lose out on $35 million in state grants next fiscal year, equivalent to a 6.5% drop from two years ago, according to estimates published by the district’s budget office. The district expects its base grant from the state, which is based on daily attendance numbers, to fall to about $500 million compared to $535 million before the pandemic. 

That could worsen an already sizable deficit for next year. In its last detailed budget update issued in June, SFUSD’s budget office pegged its deficit for the 2023 fiscal year at $112 million—an estimate that didn’t account for any further enrollment declines. In September, the state pegged the deficit at $116 million after removing certain unspecified budget reductions. The district didn't immediately respond to requests for further clarification on the size of its deficit next year, given enrollment losses.

The loss of students at S.F. public schools broadly reflected statewide trends over the past two years, during which time many families relocated, changed schools, or even pulled kids from school entirely in the face of pandemic-related hardship. 

In San Francisco, data showed the most pronounced enrollment declines among younger students, with a 13% drop in kindergarten enrollment between fall 2019 and fall 2021. White, Asian and Filipino families left SFUSD schools in the greatest numbers, according to the district. 

A decline in state funding could complicate matters for the school district, which is grappling with a sizable deficit and subject to state monitoring for the near future. 

In a letter last week, the California Department of Education notified SFUSD that it is “no longer a going concern”—an accounting term that refers to an entity’s inability to meet financial obligations—and set a deadline of Dec. 15 for the district to write a stabilization plan in conjunction with a state fiscal monitor. As part of the oversight process, the state asked SFUSD to freeze all non-essential expenditures and immediately halt hiring in positions that don’t work directly with students. 

At a Board of Education meeting last week, Michael Fine of the state’s fiscal management team warned that if the district doesn’t comply with the stabilization plan, its governing authority “may be set aside” in favor of a state takeover.

“There is nothing good about that process,” said Fine. “Now is the time to act to prevent getting anywhere closer to that point.”