Mayor Newsom Releases Rainy Day Funds to Save Teachers' Jobs
02/24/09 - Mayor Gavin Newsom, joined by city supervisors, School Superintendent Carlos Garcia and other city leaders, today announced that layoffs and program cuts to public schools will be prevented by providing $11 million from the city's rainy day fund. Newsom’s action will save 130 teachers’ jobs.
Yesterday, the San Francisco Unified School District (SFUSD) announced that they would need to send out pink slips to teachers, principals and paraprofessionals and would suffer a $51 million shortfall in mid-year and 09-10 school year cuts.
"By releasing rainy day funds, we will save teachers’ jobs," said Mayor Newsom. "We are lucky in San Francisco to have saved our extra revenue for when times get tough. Those tough times are here and we are committed to reducing as many layoffs as possible by using our rainy day fund to aid the school district."
The rainy day fund was created in 2003, when voters passed Proposition G, authored by then Supervisor Tom Ammiano. It requires the city to save revenue above 5% growth year over year, during good economic times. The account's balance now stands at about $92 million, and can change again if the city withdraws additional funding this year. The school district is eligible for up to 25 percent of the total if two conditions are met: The school district must be getting less money per pupil from the state when adjusted for inflation, and must be facing significant teacher layoffs. In FY 2008-2009, the City budgeted $19.2 million in rainy day funding for SFUSD. In addition, the City has already liquidated $6 million from the rainy day fund to solve the City’s mid-year shortfall. Next year would be the first full budget year that the city and school district may qualify for a rainy day draw. The city qualifies for up to 50% of the fund.
Newsom estimates that if the City were to trigger 50% of the funding, the rainy day balance would reduce by half, to $46 million. 25% of this figure is approximately $11 million. He cautioned that these numbers are fluid.
The rainy day fund is one of the many factors that contribute to San Francisco’s high bond rating. In California, San Mateo is the only county rated higher than San Francisco. Rating agencies cite strong management practices, high reserves, a diverse revenue base, moderate debt burden, and the city's ability to act quickly to address a budget shortfall as reasons for our rating.
"Even in the most difficult time we have the obligation to preserve public education and put San Francisco’s children first," said Supervisor Bevan Dufty, who is authoring a Board resolution supporting this action.