Los Angeles school district seeks state's money for pay hikes

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The Center Square) - The Los Angeles Unified School District managed to avoid a strike this week after reaching 11th-hour agreements with three unions. Now the district is asking for the state's help to fund those agreements.

LAUSD's request comes as critics question how the district or the state can afford pay increases in an era of staggering deficits. One critic compared LAUSD's approach to gambling.

"Rolling the dice with big spending when you don't know where you're going to find the money is an appalling way to run the second-largest school district in America,” said Susan Shelley, vice president of communications at the Los Angeles-based Howard Jarvis Taxpayers Association.

“It looks like LAUSD is intentionally creating a fiscal crisis that it can exploit to demand higher taxes," Shelley told The Center Square.

She said it was "appalling" that the LAUSD was seeking the state's help.

LAUSD told The Center Square in an email that it is taking a targeted approach to its budget to ensure every dollar is aligned to student needs and long-term sustainability.

“We are closely examining all areas of spending, including contracts and operational costs, to identify where reductions and efficiencies can be made while mitigating the impact on the classroom experience for students,” a school district spokesperson said. “At the same time, we will continue to advocate at the state level for additional, stable funding that reflects the real costs of educating students in large urban districts facing declining enrollment and rising expenses."

To avert a strike on Tuesday, LAUSD dealt with three unions: United Teachers Los Angeles, Associated Administrators of Los Angeles Teamsters Local 2010 and Service Employees International Union Local 99. The district secured tentative agreements with UTLA and AALA first, then reached one with SEIU overnight before the deadline to strike.

"It's estimated that the three agreements will cost about $1.17 billion annually," Aaron Smith, director of education reform at the Reason Foundation, told The Center Square Friday.

Further numbers on the costs to taxpayers, such as the amount being requested from the state, were not provided by various sources on Friday.

As reported this week by The Center Square, the tentative agreement with SEIU includes a 24% wage increase that the union said “will make a significant difference in workers’ livelihoods." Health care benefits will be expanded for teacher assistants, after-school workers and community representatives. Meanwhile, layoffs for hundreds of information technology employees are being rescinded, and LAUSD will have no subcontracting of work to outside vendors.

The tentative agreement reached with UTLA would increase its members’ salary scales by 11.65%. The tentative agreement would also increase the beginning salary for a teacher to $77,000 per year.

AALA’s tentative agreement called for increases to school administrators' salaries of 11.65% over two years.

Los Angeles Mayor Karen Bass, the district's Acting Superintendent Andrés E. Chait and union members called the agreements a win for members and students.

Smith of the Reason Foundation does not see it that way. He considers the tentative agreements to be fiscally irresponsible.

“LAUSD has a structural deficit, meaning they spend more money than they take in each year,” Smith told The Center Square.

Even before this new spending, Smith said LAUSD was projecting a $1.5 billion budget deficit next year.  

“One reason is that they have too many staff on payroll,” said Smith. “Since the start of COVID-19, LAUSD has lost 75,000 students but has only reduced staff by just over 300 employees. That’s why the district’s board recently approved a plan to lay off up to 3,200 staff.”

Smith said LAUSD could now be looking at even more layoffs in the coming years, plus widespread school closures.

“LAUSD is hoping the state will bail them out with an influx of new funding, but the state is also on shaky financial footing, as California’s Legislative Analyst’s Office recently warned," Smith said.

As Smith explained, the state is spending more than it is taking in and is vulnerable to revenue shocks. A downturn in the stock market, for example, would wreak havoc on California’s budget and K-12 dollars, he noted.

“The agreements are bad for kids, teachers and taxpayers,” said Smith. “In the long run, they’ll make a bad fiscal situation even worse.”

Smith is not the only one sounding an alarm or casting doubt on the idea of state assistance to fund LAUSD’s agreements.

Lance Izumi, senior director for education studies at Pasadena-based Pacific Research Institute, said he does not know where LAUSD officials think they're going to get more money from the state. 

“In the press conference that Karen Bass and the superintendent held down there in L.A., they said they were saying that ‘Oh, well, Los Angeles has the most powerful delegation in the state Legislature.' And while that might be, they still can't wave a magic wand and produce money that's not there,” said Izumi.

“I don't care how powerful they are. And in fact, the word is that [Gov.] Gavin Newsom is going to be telling legislators come May when they when he releases his revised state budget, based upon newer revenue data, that things are things are pretty desperate and that there is no money, that there's going to be some very significant cuts that they're going to have to endure.”

As a result, Izumi said, “It is fantasy thinking on the part of LAUSD to believe that this money is going to somehow magically appear” from the state.

“I think that they wanted to kick the ball to Sacramento in the hopes that they would take care of their problem, but it's not going to work that easy," said Izumi.

Another person not surprised by LAUSD’s financial problems is Maria Luisa Palma, executive director of Oleada Inc., a nonprofit advocating for parents and holding LAUSD accountable for academic results.

Palma told The Center Square that “it was publicly documented since the Second Interim Budget presentation in March that more state funding would be needed” to cover expenses.

“The Board of Education March presentation showed that additional state funding would be needed just to meet the initial compensation offers already made to UTLA, SEIU Local 99, and AALA/Teamsters at that time,” said Palma. “Multi-Year Projections, which included Gov. Newsom’s January Proposed Budget revenues and those initial compensation offers, documented the 2027-28 school year would end with an unrestricted/unassigned General Fund balance of -$235 million and -$1.8 billion for 2028-29.”

Given the additional raises negotiated in the three new tentative labor agreements, Palma said those negative balances are sure to increase.

Meanwhile, Palma and Izumi do not see how this will help academics.

“People talk about getting a bang for your buck,” said Izumi. “There’s no bang here.”