More than two years ago, San Francisco voters heartily approved a new public school fund by setting aside millions in existing property tax dollars. The idea was to buffer public schools from a budget crunch, boost students’ mental health and wellness, and provide them more support to meet new academic goals in math, literacy, and college readiness.
Now the budget crunch, fueled by a years-long drop in enrollment, has arrived. The San Francisco Unified School District is preparing for hundreds of layoffs in the next few months, part of a plan to cut nearly 10 percent of its $1.3 billion budget.
But the extra money that voters approved, known as the Student Success Fund, has been caught in a bottleneck as state regulators clamp down on the school district’s finances. Some school staff who thought help was coming are frustrated, and they say the situation is made worse by district and city officials who aren’t telling them how to adjust.
Money from the Student Success Fund is distributed through grants for schools to hire extra staff to provide support, such as literacy coaching and mental health services, and to buy some materials. For this 2024-25 school year, the city fund designated $26 million for grants.
But only $14 million in grants were approved. And only a sliver of that money — $1 million — was spent as of September, more than a month into the school year. That’s in addition to $8.5 million unspent from the previous school year, the fund’s first year, which rolled over to this year.
The school district and the city’s Department of Children, Youth and Their Families (DCYF), which administers the fund, confirmed these numbers to The Frisc.
Update 4/17/25: At a City Hall hearing, DCYF officials said the district has spent $5.4 million from the Student Success Fund so far this year.
Sherrice Dorsey-Smith, DCYF acting executive director, said the main problem was that schools, which received grant approvals in spring 2024 during the award period, weren’t ready to hire for the positions until the beginning of the 2024-25 school year.
“With no school happening in July and beginning in mid August schools were just getting their bearings,” Dorsey-Smith wrote in an email.
At least one school principal tells a different story.
Frozen in place
“That’s completely not the case,” said Bret Harte Elementary School principal Jeremy Hilinski, when he heard Dorsey-Smith’s explanation. “There’s a lot of us itching to hire but we’re told we can’t. A lot of us are getting nervous that this is going to be the situation going into next year, too.”
Hilinski, whose school is in the Bayview, had a Student Success Fund grant approved last spring to hire a paraeducator for students and an instructional coach for teacher training. He had viable candidates ready until a state-imposed hiring freeze.
It began last May, when the California Department of Education took partial control of the district after SFUSD’s budget proved too shaky. In bureaucratic speak, SFUSD received a “negative budget certification,” empowering state advisors to pause or reject financial decisions. The only jobs exempt from the freeze, according to the lead advisor, are “essential” positions such as classroom teachers and janitors.
“The hiring freeze had everything to do with this,” Hilinski said, adding that he hasn’t had guidance from the district about what to do next.
$26 million was earmarked for grants this school year. Only $14 million in grants were approved. Only $1 million of the awarded money was spent as of September, more than a month into the school year.
United Administrators of San Francisco president Anna Klafter, who represents school principals, central office workers, and other managers, said both the superintendent and HR department have told her the state’s freeze is “the hold-up.”
Neither DCYF nor SFUSD answered questions about the impact of the freeze on the grant spending. However, both Dorsey-Smith and SFUSD spokesperson Laura Dudnick said the fund spending has improved since the September report. Dorsey-Smith anticipates the next report, with numbers through the end of December, will reflect the increase. It’s not clear when they will release the report.
“SFUSD and DCYF are implementing Student Success Funds for its intended uses to promote student well-being and academic success,” Dudnick wrote.
They really need to go through the full exercise of layoffs to know where they stand.
elliott duchon, the california department of education advisor overseeing Sfusd’s finances
Even with more money out the door since September, the district and DCYF haven’t conveyed a plan to spend the year’s full $26 million allotment. (It cannot be used to pay for core staffing or replace other city funding for schools.)
“There’s this boatload of money that’s supposed to go to students and it’s not,” said Leslie Hu, secretary of the teachers union, the United Educators of San Francisco. “If they can’t hire, where’s the communication to the school sites to say we can’t hire for that and come up with another plan? [The state] has incredible control over who gets hired and doesn’t get hired.”
No time to hire
SFUSD has been struggling with its budget for years, prompting the state to appoint fiscal advisors in 2021 before escalating to partial control last year. Now, in addition to the enrollment drop that reduces state funding, the district is bracing for the potential loss of “upwards of $50 million” in federal funds, Superintendent Maria Su said last week, as the Trump administration threatens to kill the Department of Education.
One of the state’s advisors, Elliot Duchon, says with big cuts and layoffs coming, this is no time to add non-essential employees to the payroll. Exacerbating the issue is the district’s chronic mismanagement of personnel records — simply knowing who’s on the payroll at any given moment.
“They really need to go through the full exercise of layoffs to know where they stand,” Duchon told The Frisc. “They know where the money has to be taken out of, but not who the teachers are. There are some unspent grant funds that will continue to be unspent until the unrestricted part of the budget continues to get resolved.”
Hiring instructional coaches, like the one Bret Harte principal Hilinski thought he was getting, would only add to the confusion, in Duchon’s telling. Because of seniority rules, they’d be first on the list of upcoming layoffs. (Duchon is also holding up other funds, such as money raised by parent-teacher associations.)
But some positions that must be legally filled, such as special education roles, have also run into bottlenecks – made worse by a $30 million accounting error last summer.
Hilinski estimates that Bret Harte is sitting on close to half a million dollars in total grants affected by the hiring freeze. He worries that not spending the first year of a multiyear grant, many of which last until 2026 or 2027, will imperil being able to spend the rest of it and apply for more. Funds left unspent will go back into the Student Success Fund reserve, according to DCYF.
Duchon said if money is expiring, a school should spend it. One workaround is to move a current district employee into an unfilled position, nullifying the need to hire someone new. But he emphasized that the district has not raised the issue of expiring grants: “We wouldn’t stop them from spending money on a grant that’s going to run out. We might stop them from hiring a person that’s [only] going to be there for a few months.”
“This is exactly why we have to diligently work toward receiving our positive fiscal certification from the state,” said Board of Education president Phil Kim. “We really need to be able to manage our own budget.”
For the community
Another complication is the Student Success Fund’s focus on community schooling, a model that requires administration, staff, and parents to share responsibilities in the school’s decision-making.
Abraham Lincoln High School won a $350,000 grant to use for extended staff hours to tackle chronic absenteeism. However, Lincoln needs to hire a community school “coordinator” to use the grant, and it hasn’t been able to hire one.
“It’s the slowness of getting through HR that has befuddled everyone else,” said Rex Ridgeway, who is on the Student Success Fund advisory council and is a former Lincoln PTSA president. “We can’t really spend it or go after our goals until we have a community school coordinator.”
Whatever the next year or two of budget cuts brings, the Student Success Fund isn’t going away for at least a decade. After ramping up, the city’s annual contributions will hit $60 million in 2026-27 and more added until 2038, when the fund sunsets.
The bottlenecks are holding the district back from addressing its own academic goals. Many of the support staff the fund is meant to hire are to help with math, literacy, and other five-year academic goals the district set in 2022. About half way in, progress has been limited.
“If kiddos are not getting their support, how are they going to get to these academic progress measures that the district intends for them?” said Vanessa Marrero, executive director of Parents for Public Schools San Francisco. “At a time when we’re faced with such federal threats, I think it’s even more important to streamline and make sure our public schools have what they need.”
At last week’s Board of Education meeting, Superintendent Su said that without budget fixes, the district is expected to run out of cash in mid-2026. The state won’t loosen its grip until the district passes a balanced budget and shows it’s sticking to the plan, Duchon has previously told The Frisc.
In the meantime, board president Kim said, “Our schools deserve that clarity. That clarity, I hope, is coming soon.”
The special education vacant positions debacle still hasn’t been addressed by the district.
Dr. Wayne put an extra layer between Special Education and himself. The executive cabinet, which did not include Special Education, ignored the special education department when they raised alarms over closing positions which looked vacant on paper. However those positions were actually active and filled with agency staff.
This meant after Wayne closed those positions it made it impossible to fill even with subs because they no longer existed. On the books it looked resolved. The district played shell games with the special education budget.
I put in a CPRA request for communications around these special education vacant positions but surprising nobody, I was stonewalled.
Transparency is a foreign concept to SFUSD.