After a two-year trial run, San Francisco agreed in 2019 to cover all City College tuition for SF residents, a notable move that drew national attention. The 10-year deal was meant to stabilize the beleaguered school, which had recently avoided a potential death blow from a state agency and was suffering from a years-long erosion in enrollment.
But now, roughly halfway through the deal, the “Free City” program is on the rocks, and numerous voices at the college and in City Hall are calling for early renegotiation.
Last year, the Breed administration unexpectedly gave CCSF about half the money it was supposed to hand over. The new Lurie administration hasn’t signaled its intentions, but citywide budget talks begin soon as SF faces a record $820 million deficit that could more than double if federal threats come to pass.
“This is an unprecedented time for the city and budget,” Board of Supervisors budget chair Connie Chan tells The Frisc. “What I’m hoping is both CCSF and the city have a shared sense of urgency.”
Some ideas for a revised Free City deal include more cash assistance to low-income students and debt forgiveness, which other community colleges are doing to bring back students. SF’s Free City Oversight Committee, which Chan also sits on, will make recommendations next Thursday.
(Disclosure: This reporter is taking courses at CCSF this semester.)
Not only did Breed’s team cut the Free City funds in half last year, they also clawed back millions of dollars in unspent reserve funds. The mayor’s office also suggested the program should limit free tuition to students seeking degrees or certificates, running counter to campaign promises when the Free City idea went before SF voters. “Clearly there’s some confusion about how decisions were made last year,” says Chan.
The Free City program cost $12.4 million in the 2023-24 school year, according to Interim Chancellor Mitchell Bailey. The college’s budget this academic year is $212 million. Under Breed’s final budget plan, SF’s Free City coverage will drop to $7.2 million in 2025-26 unless Lurie’s budget changes it.
Some at the college fear there won’t be enough to cover free tuition for residents. “If Mayor Lurie does not restore some of that allocation, the college and program will be significantly underwater within the next year,” says Alisa Messer, former president of the CCSF faculty union, American Federation of Teachers 2121, and part of a coalition to preserve Free City. “Leaving the college holding the bag is not the move.”
Lurie and staff have been mum on the issue. The mayor’s deputy who oversees health, homelessness, and family services, Kunal Modi, attended a recent oversight committee meeting but did not make a presentation. After multiple queries, a Lurie spokesperson responded that he did not have information about the mayor’s budget plan for Free City.
The timeline is not just on the city side, it’s also on the City College side.
sup. connie chan, chair of the board of supervisors budget committee
If renegotiation of the agreement is coming, CCSF has left itself in a weakened position. It is supposed to provide annual financials to a city auditor, but the most recent audit was for the 2021-22 school year. The lack of financial transparency comes a few years after CCSF ended a long accreditation crisis in 2017 for alleged fiscal mismanagement. The college drew the ire of regulators again in 2024 for board governance problems.
Without those overdue financials, it can’t convince the city it needs the money back, Chan warns.
“The timeline [to renegotiate] is not just on the city side, it’s also on the City College side,” Chan says.
A long drop and recent rise
Free City is key to the college’s survival, advocates say.
“If they reduce the program and only cover certain programs, enrollment will go down,” says Alan Wong, a current trustee and board president last year. “If our enrollment goes down that hurts our chances to stabilize the college. The most important thing is to protect free tuition for all classes.”
City College suffered a reputation hit from the accreditation crisis, which got even more complicated when the agency overseeing the process came under fire itself. Then the pandemic compounded an ongoing enrollment drop.
In 2010, CCSF had about 83,000 students. Last year, it had fewer than 40,000. But now enrollment is on the rise, up 9 percent for the 2024-25 school year.
San Francisco made Free City possible with the 2016 passage of Proposition W, a real-estate transfer tax increase spearheaded by former Sup. Jane Kim. Proponents campaigned that it would create the Free City program, but the measure did not gain two-thirds approval, which is required to dedicate funding for a specific target. As a simple majority measure, Prop W tax revenue goes into the city’s general fund.
That led to political wrangling. The Board of Supervisors passed a resolution to use the funds for Free City, but it was nonbinding. After some budget spats, free tuition began in 2017 as a two-year pilot, which U.S. Sen. Bernie Sanders helped celebrate.
In 2019, City Hall agreed to fund the program with about $15 million each year for a decade. (The agreement is called a memorandum of understanding, or MOU.) In exchange, supervisors called off a push to permanently set aside the funds for free tuition.
When the Breed administration cut funding without negotiation last year, “they just reneged on [the MOU] unilaterally,” says Wong.
In September, supervisors urged City Hall to renegotiate and offer more help for low-income students. Interim Chancellor Bailey and trustees want to use some Prop W funds to cancel student debt, which they were able to do in 2023, and help students with living costs and supplies. “The college is interested in increasing the ability to provide greater resources to those students who are in most need of these additional resources,” says Bailey via email. “The college looks forward to strengthening its partnership with the City and will mutually determine if any changes are necessary to the existing MOU.”
What students want
A student group has its own proposal, starting with total restoration of funds. After covering tuition, they say the money should cover $200 grants for all Free City students regardless of their economic status. They also want to allocate $1 million each for debt cancellation and to bolster the school’s housing, food, and childcare assistance. The students also say CCSF should have more control over its spending, rather than ceding power to the city.
Eddie Escoto, a full-time biology student, has been hosting teach-ins with the group. “It seems like [CCSF] wasn’t part of [Lurie’s] plan,” says Escoto. “Free City is really a lifeline to a lot of us to have futures. The city is betraying all its people by breaking its promise.”
City College has a balanced budget this year, thanks in part to a state provision that bases funding on pre-pandemic enrollment levels. But the provision also makes the college ineligible for cost-of-living increases starting next year, which means revenue will stay flat unless it adds students. CCSF expects a deficit of $8.4 million by 2027-28.
Bailey says if City Hall sticks with its $7.2 million Free City allocation next year, the college “could see about $2 million less in funding and thus $2 million less in student use.”
Bailey also says his finance team is working with auditors to prepare the delinquent reports from 2022-23 and 2023-24. Until then, City Hall budget staff is stuck with old numbers, says Sup. Chan. She warns that a new CCSF deal isn’t likely before getting that financial data, or before the city’s new budget is approved this summer.
She hopes SF preserves its unusual arrangement: “Voters voted with the mindset that this is what it would be for. I think that’s important.”