LAUSD avoided a strike and now wants a state taxpayer bailout to avoid fiscal disaster

Parents are rightfully relieved that Los Angeles Unified labor strife didn’t shut kids out of classrooms, as it did in 2023. But the victory for teachers and other staff could be short-lived. The tentative labor agreements with United Teachers Los Angeles (UTLA) and other unions are estimated to cost about $1.2 billion annually, money LAUSD doesn’t have.

UTLA’s deal includes a 12% average salary increase for teachers, paid parental leave, class-size reductions, limits on subcontracting, and hiring hundreds of new support staff, such as counselors, nurses, and psychologists. Beginning teachers will now make $77,000 per year, up from $68,000.

The school district’s separate agreements with the unions representing school administrators and service employees will also boost pay for principals, custodians, cafeteria workers, and other staff.

“The flexing of our collective power forced LAUSD to direct significant funding into critical priorities identified by UTLA members in the Win Our Future contract demands,” said UTLA.

Caving to union demands is easy, but paying for them might prove difficult. LAUSD spends more money than it receives each year from federal, state, and local governments. They project a $1.3 billion budget deficit this year and a $1.5 billion hole in fiscal year 2027.  A big reason for the deficits is that the district has too many non-teachers on its payroll.

Despite losing about 75,0000 students since the start of the COVID-19 pandemic, LAUSD has reduced staff by only 321 employees. Birth rates are down, families are moving out of the region, and parents are seeking other options, such as private and charter schools. Yet, the district has added nearly 2,000 support staff, like counselors, nurses, and assistant principals.

LAUSD also has too many schools. Nearly half of the district’s elementary schools have lost more than 50% of their enrollment over the past two decades, according to research published by Available to All. Empty schools are costly to maintain, adding significant costs for the nation’s second-largest school district.

Billions of federal pandemic relief dollars, plus rising state aid, helped LAUSD plug its budget holes in recent years. But the COVID-19 funding from taxpayers has expired, and California’s fiscal outlook is uncertain, leaving a question of how LAUSD will cover the new spending.

The answer also depends on who you ask.UTLA believes the district can reallocate funds and tap into its budget reserves. “This [agreement] means that resources will begin to be redirected toward our babies and the classrooms that need them most,” claimed UTLA President Cecily Myart-Cruz.

LAUSD certainly has plenty of fat it could trim from its budget, but it is severely limited by what the unions will allow to be cut. While LAUSD projects $1.1 billion in unrestricted budget reserves for fiscal year 2028, all but $10 million of those reserves are already assigned to other uses.

Ultimately, LAUSD agreed to these deals knowing its only hope is a bailout from state taxpayers.

“We also want to be collectively fierce advocates to Sacramento for the funding that our students frankly deserve and need,” said Acting Superintendent Andrés Chait.

But LAUSD already gets nearly $27,000 per student from taxpayers, with little to show for it. Half of the district’s 4th graders were reading below basic level on the latest National Assessment of Educational Progress exam.

As the district looks to Sacramento, there are also concerns about the state’s own fiscal outlook. State revenues have been growing, “but not fast enough to catch up with the state’s spending level,” concluded Gabriel Petek of the non-partisan Legislative Analyst’s Office. “Both our office and the administration expect the state to face multiyear deficits, with estimates ranging from $20 billion to $35 billion annually,” LAO concluded in February.

This means that, unless the fiscal stars align, LAUSD could be facing widespread layoffs and school closures in the years ahead.

“My hunch is that the only way the district will be able to come up with the money is to lay off lots of people,” said Pedro Noguera, dean of USC Rossier School of Education. “It’s unsustainable.”

LAUSD and the unions share blame for irresponsible labor deals that put jobs in jeopardy. LAUSD recently approved a plan to lay off up to 3,200 employees, and more could be on the way.

A version of this column first appeared at The Orange County Register.

The post LAUSD avoided a strike and now wants a state taxpayer bailout to avoid fiscal disaster appeared first on Reason Foundation.

Source: https://reason.org/commentary/lausd-avoided-a-strike-and-now-wants-a-state-taxpayer-bailout-to-avoid-fiscal-disaster/