Updated Feb 7, 2026
The Contract Dispute, Explained
A parent-friendly breakdown of the SFUSD factfinding report: what each side wants, what the panel recommends, and what it means for your family.
The core question
What does each side want?
After nearly a year of failed negotiations, a neutral panel has recommended a compromise. The union representative only "concurred in part."
| Issue | Union Wants | District Offered | Panel Recommends |
|---|---|---|---|
| Salary Increase | 9% over 2 years (4.5%/yr) | 4% over 2 years (2%/yr) | 6% over 2 years (3%/yr) |
| Family Health Benefits | Fully-paid coverage ($14M/yr) | Use parcel tax funds (outside contract) | Parcel tax as temporary bridge |
| Special Education | Workload model ($22M/yr) | Keep caseload model (status quo) | Pilot program at select schools |
| Class Sizes | Hard limits (not goals) | Keep as goals (~$5M to change) | Keep as goals (no change) |
| Staffing (Nurses, Counselors) | At every school ($82.1M/yr) | Current staffing levels (no change) | Current staffing levels (no change) |
| Sanctuary Protections | Written into contract | Not a bargaining subject | Joint resolution (not in contract) |
| AI in Schools | Specific contract language | Working group to study | Working group to study (no change) |
Who agreed to what?
The panel issued its recommendations on February 4, 2026. The union's partial concurrence signals the recommendations may not be accepted.
Source: Factfinding Report, p.19
Following the money
What does it cost?
Every proposal has a price tag. Here's what each side's demands would cost, and what the district says it can afford.
💰 Cost of Union Proposals
- Per 1% raise (all staff)$10.17MReport, p.12
- Family health benefits$11-14M/yrReport, p.3, 9
- Special ed workload model$22M/yrReport, p.3
- Full staffing proposal$82.1M/yrReport, p.4
- Class size limits~$5MReport, p.10
📊 District Financial Position
- Operating budget (2025-26)$1.2BSFUSD
- Cuts made (2025-26)$114MSFUSD
- More cuts needed (2026-27)$102MSFUSD FAQs
- Enrollment decline (ADA)9.42%Report, p.7
- Reserve funds~$100MGrowSF
Cost of living context
The panel looks at whether raises keep up with inflation. Here's how California CPI has changed:
Source: Factfinding Report, p.15-16
The consultant controversy
The union argues SFUSD spends too much on outside contractors. The panel recommends reallocating these funds. But the report doesn't include specific dollar amounts for total consultant spending.
⚠️ If schools close during a strike
SFUSD would lose $7-10 million per day in state penalties for ceasing instruction.
Source: SF Standard, Feb 3, 2026
The key question
Does SFUSD have money it's not using?
You may have heard claims that SFUSD is sitting on $429 million in reserves. Here's what the district says — and what the numbers actually show.
The two actual reserves
SFUSD maintains two separate reserves, each with a specific purpose:
Board-Established Reserve
Created by the Board of Education as a safeguard against emergencies and to prevent returning to state oversight. Used to protect classrooms from sudden cuts.
State-Mandated Reserve
Required by California law. Can only be used for insolvency or bankruptcy — paying bills as the district winds down. Never available for salaries or programs.
📊 Context: State recommends 17%
While California only requires 2% reserves, the state recommends 17% as best practice to protect against emergencies. SFUSD's 8% Board reserve is a step in the right direction but still well below recommendations.
What about the "$429 million"?
This number has been cited as evidence that SFUSD has money it could spend on raises. The district says this reflects a misunderstanding of something called fund balance.
Fund balance ≠ Reserves
Fund balance is what's left at the end of a fiscal year when actual spending doesn't perfectly match the budget. Every local government has this — including SF City Hall.
It's one-time money, not ongoing revenue like taxes. Once it's spent, it's gone. You can't count on it year after year.
According to the district, half of the $429M figure is actually restricted funds — money dedicated to specific uses (like Title I or PEEF) that can't legally be used for across-the-board raises.
Why can't fund balance pay for raises?
🏠 Think of it like buying a house
Using one-time fund balance for permanent raises is like buying a house because you have a down payment — but with no idea how you'll pay the mortgage next month. When the money runs out, you'd face even deeper cuts to cover the ongoing cost.
The district says it's already using available fund balance to:
- Plug the structural deficit and avoid state oversight
- Prevent deeper, immediate cuts to classrooms
- Avoid additional layoffs of educators and staff
- Stabilize the district while working toward long-term sustainability
New proposal: Fund Balance Bonus Program
As part of negotiations, SFUSD has proposed a new program that would put excess fund balance directly into staff pockets:
💰 The proposal
Any general fund balance over $50 million would go into a direct-to-staff bonus program.
The district frames this as a win-win: they get fiscal certainty (only spending money they know they have), and teachers get bonuses when there's a surplus.
Source: SFUSD Negotiations Updates (Feb 2026)
The details
Key issues in the dispute
Special Education
The panel acknowledged that special education teachers face "overwhelming demands" as student needs become more complex. SFUSD has more than 6,800 special ed students, about 14% of enrollment.
Panel's recommendation
Create a pilot program at 3 elementary schools, 1 middle school, and 1 high school to test workload-based models before district-wide implementation.
Source: Factfinding Report, p.10, 13-14
Sanctuary Protections
The union wanted contract language designating SFUSD as a "sanctuary district" with commitments to support immigrant and unhoused families, including legal services, housing assistance, and employment support.
Context from the report
The panel cited the "outrageous attacks on immigrant communities" and specifically mentioned the detention of five-year-old Liam Conejo Ramos and his father.
Source: Factfinding Report, p.16
However, the panel ruled this is not a "mandatory subject of bargaining" and shouldn't be in the contract. They recommend a joint resolution instead.
Salary Competitiveness
The parties dispute how SFUSD salaries compare to other districts — but they're measuring different things:
Why the rankings differ: The union's analysis compares base salaries. The district's analysis includes benefits (health insurance, retirement contributions), which are generous in SFUSD. Both sides use mostly the same comparison districts — they just measure different things. (Factfinding Report, p.9)
What happens next
Strike timeline
Methodology
Sources
Every number links to an official public document or news report. The factfinding report is the primary source; external sources provide additional context.
Official Documents
News Coverage
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