On Thursday, the San Francisco Unified School District signed an agreement with the Service Employees International Union Local 1021 to increase salaries by 10.5 percent, signing its third labor agreement in a whirlwind two months.
Days prior, the district had signed a tentative agreement with Common Crafts, a tradesman’s union, to increase salaries by six percent over three years. The agreement comes less than two weeks after the district entered into an agreement with the United Educators of San Francisco following the city’s first teachers strike in nearly 50 years, which led schools to shut down for a week.
The SEIU, which represents 1,060 district employees, including school secretaries, cooks and custodians, has been in ongoing negotiations with the district for five months, while the teachers union has been in negotiations with the district for over 10 months.
Repeatedly, district officials have pointed to a wide budget deficit and severe financial hardship, resulting in the district entering state oversight in 2024, when asked why it could not meet the union’s demands. But in just weeks, the district reversed course.
At a March 10 school board meeting, the district presented its second interim fiscal report, providing a first look at how the agreements will impact the district in the near future. The results are potentially grim.
Over the past few weeks leading up to the teachers strike, Superintendent Maria Su repeatedly told the press and labor negotiators that dipping into the district’s over $400 million reserves was, simply, “not an option.”
Now, projected spending shows that the district will significantly spend its reserves to pay for its labor agreements, potentially depleting its “restricted funding” by 2028.
The 2026 interim fiscal report, which does not include the new tentative agreement with SEIU, shows that in order to fund salary and benefit increases for teachers and Common Crafts, the district is predicted to spend over $900 million in restricted funding, or one-time funding intended for a specific purpose.
By the 28-29 school year, the district is expected to overspend by $126 million, depleting this funding source.
The 2028-2029 fiscal year “is a danger year for the district,” said deputy superintendent Chris Mount Benites, as he presented the report to the school board on March 10.
The district’s funding predictions are not always accurate: In 2024, the district underprojected its revenue by $82 million, according to the district’s spending report.
But, if true, and without further course correction, a future budget deficit could lead to layoffs and require harsh means to cut the district’s budget and avoid overspending by millions of dollars.
“We don’t have a crystal ball,” said Benites when asked by school board commissioner Matt Alexander how accurate the projected deficit is. “We’re looking at trends,” which he noted are sometimes inaccurate.
The district’s agreement with its teachers is estimated to cost approximately $183 million, using funds from the district’s restricted general fund, dipping into one-time funding, and spending from its unrestricted fund. The district did not answer by publication time how much the agreement with SEIU 1021 is projected to cost, which will raise the salaries of the 1,060 union members.
SEIU 1021 joined teachers in a sympathy strike in February. During the school board meeting earlier this month, over 20 members of the union lined up before the podium to criticize the district for failing to sign their contract.
Josh Davison, a chef at SFUSD, told the board earlier this month that his kitchen is severely understaffed, but he is unable to hire more workers without a contract. “We’ve been in contract negotiations all year,” he said. “It’s time to get it done.”