Mayor Breed to pardon a $26 million loan to the San Francisco School District
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In a major relief to the San Francisco Unified School District, Mayor London Breed said she would pardon a $26.6 million given to the school district if they develop a "comprehensive multi-year plan" to stabilize its finance and introduce a budget that implements the plan.

In 2019, the City granted the loan to advance funds for the Proposition G Living Wages for Educators Act (LWEA) parcel tax.  However, $150 million were withheld from SFUSD in the past three years because of pending litigation on Proposition G, said the Mayor's office.

The District didn't halt the increased salary payment; instead, it paid it from the $26.6 million loan granted by the City, even as the litigation continued over the years. With the California Supreme Court ruling in favor of the school district, the District now has access to the withheld funds.

Earlier this year, SFUSD proposed massive cuts to contain a budget deficit and avoid a state takeover. The 2022-2023 Proposed Budgeting Plan included a cut across individual schools, specialized student services, and even layoffs to eliminate the $125 million shortfalls.

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Mayor London Breed and  Supervisor Hillary Ronen are offering to forgive the loan to address the structural budget challenges.

While announcing SFUSD's bail-out plan, Mayor London Breed acknowledged the uncertain fiscal crisis and said forgiving the loans is the step in the right direction. She added that the executive of the multi-year comprehensive plan would ensure that the loan plays a crucial role in stabilizing the District and the schools.

Supervisor Ronen expressed her concern over the financial crisis at the school district and stated that public schools in San Francisco and throughout the state are "chronically underfunded." She urged School District leaders to responsibly focus on their duties and  take all financial decisions considering student wellbeing. She further promised to extend her support to public schools, students, and educators.

The California Department of Education (CDE) is also stepping up its effort to help manage the massive budget deficit. According to city officials, CDE will keep a close watch on the District's financial condition. It will further assign a fiscal expert to offer technical advice to the Board of Education and SFUSD administration.
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