School Choice

LAUSD's Fiscal Crisis Can't be Blamed on Charter Schools or Declining Enrollment

Rising benefits costs and a bloated administration is putting Los Angeles' schools deep in the red.

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Los Angeles Unified School District has lost 245,000 students over the last 15 years. Officials frequently claim charter schools are taking students and causing LAUSD's budget crisis in the process. But a new report shows the district's spending, including its hiring of more administrators as enrollment drops, is to blame.

A new Reason Foundation study finds only 35 percent of LAUSD's enrollment decline over the past 15 years is due to students going to charter schools. In fact, as the district continues to lose students—losing 55,000 since 2013—a smaller percentage of the loss can be attributed to charter school students. Only 13 percent of the district's enrollment loss for 2017-18 stemmed from students choosing charters.

In the last five years, LAUSD's K-12 student enrollment dropped by nearly 10 percent and the number of teachers decreased by more than 5 percent. According to the California Department of Education, LAUSD's per-student revenue went up 33 percent between FY 2012 and FY 2016 so LAUSD should have had more revenue to spend on fewer students.

But, even as it was losing students, the number of total LAUSD employees grew by 5 percent over the last five years, primarily thanks to a nearly 16 percent increase in administrators.

Additionally, the costs of the district's employee benefits have increased 44 percent since 2014. And its spending on outside consulting services rose by 110 percent since 2014. As a result of these decisions, LAUSD's long-term debt liability, which was $8 billion in 2007, tripled to $25 billion by 2017.

Just as troubling, the new Reason study finds that just four years from now, in 2022, the district's spending on pensions, health care, and special education programs will be eating up over 57 percent LAUSD's main operational funding before a single dollar is spent on a regular school program.

A growing number of families across Southern California rightly view charter schools as a high-quality option. They should not be scapegoated for LAUSD's financial troubles because they sought-out high-performing schools for their children. Los Angeles' public charter school students are outperforming students in LAUSD's traditional schools. For example, on the National Assessment of Educational Progress, also known as the Nation's Report Card, 8th-grade students in public charter schools outscored LAUSD students in traditional public schools by 26 points in reading and 28 points in math.

Southern California charter schools are also putting their students on a significantly better path to pursue college. Whereas less than half of LAUSD's traditional public-school students in the class of 2015 had passed their A–G requirements—the courses needed to enroll in University of California and California State University system schools—85 percent of Los Angeles charter students completed these courses. Just 13 percent of LAUSD students were accepted to the UC system in 2013 compared to the 20 percent of Los Angeles charter students who earned admission to UC schools.

It makes sense for parents and students to choose charter schools that are outperforming LAUSD in almost every measure, and it won't be surprising if more and more parents select charter schools in years to come. Additionally, the state's Department of Finance projects that over the next decade Los Angeles County will lose another 119,000 K-12 students, more than any other county in California.

LAUSD is going to have to stop blaming its fiscal situation on charter schools and start addressing the root causes of its own financial woes: spending more than it takes in, in large part due to long-term pension and health care costs, and its insistence on increasing staffing levels even though there are fewer students to serve.

LAUSD is going to have to right-size itself—closing some schools and reducing administrative positions to align with falling enrollment. The fiscal crisis will also force it to implement reforms that reduce long-term pension and health care costs Ultimately, the district will have to prioritize and focus on its core mission: educating kids, not providing jobs and retirement income to administrators.

Lisa Snell is director of education policy at Reason Foundation and co-author of the new study "A 2018 Evaluation of LAUSD's Fiscal Outlook."

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  1. “…deep in the read.” I thought that was the point of school.

    1. The person who made that mistake is probably a product of the LAUSD.

  2. Just 13 percent of LAUSD students were accepted to the UC system in 2013 compared to the 20 percent of Los Angeles charter students who earned admission to UC schools.

    That’s because all of LAUSD students go on to Harvard except for the Asian ones, they need not apply. /sarc

  3. Wouldn’t ‘accepted to at least one college or university’ be a better measure than ‘accepted to one or more of the UC schools’?
    I’m actually curious, not just being snarky. Are the numbers correlated or are the only readily available (or reliable?) numbers for UC admissions?

  4. LAUSD’s Fiscal Crisis Can’t be Blamed on Charter Schools or Declining Enrollment

    Sure it can. Also to blame – racism, sexism, global warming and Donald Trump. You just have to repeat the arguments long enough and loud enough and they become part of the conventional wisdom.

    1. Public schools are excuse factories and they are very effective and efficient.

  5. Better dead than read.

  6. LAUSD is going to have to stop blaming its fiscal situation on charter schools and start addressing the root causes of its own financial woes

    No they won’t. First rule of public service is to never admit fault. Besides, they can always raise taxes.

  7. FWIW: We lived in Pasadena Unified School District for several years. Given that Pasadena is home to one of the most rigorous colleges in the nation (caltech) and has a rather affluent population, you would expect some pretty decent schools. However, except for one or two K-6 standouts and a charter or two, the schools were terrible. The schools were so bad that there was a thriving market for private schools. We enrolled our oldest in one of the private schools, for around $11k per year, with another $2k of expected donations. Compare that to the $13k per student year that PUSD spends on its students (plus PTA donation drives), and you see just how insanely inefficient these schools are.

    The PUSD apologists tended to blame this on LAUSD, believe it or not. According to them, LAUSD encouraged families to send special needs kids to PUSD, which drove up the price of education as PUSD had to accept them.

    While I am sure that some of the disparity is that PUSD must accept all kids, compared to Private Schools, I am convinced that it is also mis-spending. I somehow learned to read and math with chalk boards and recycled paper, but every year, my friends were coming to me with fund raisers to buy new “Smart Boards” for their PUSD classrooms, or to bring in a new councilor for their school. It seems clear that these schools need to focus back on priorities.

    1. Profits are the price we pay for efficiency.

      Because government has no profit incentive, it is inherently inefficient.

      1. I would say “profits are the rewards of efficiency “.
        Because being efficient isn’t easy.
        It often involves hard work and tough choices.
        And when you choose to be efficient, some people’s toes get stepped on, to the point where they no longer have a job.
        All of which is a foreign concept to any taxpayer funded organization.

  8. Ultimately, the district will have to prioritize and focus on its core mission: educating kids, not providing jobs and retirement income to administrators.

    I think you’ve got that backwards: the clearly see their core mission as providing jobs and retirement income to administrators (and teachers), not educating kids. That “education kids” crap is just the bullshit they tell the rabble to keep them from revolting. Although judging by their plunging enrollment, at least some of the rabble aren’t buying it anymore.

    1. They’re just putting in time until they get their pension.

  9. Los Angeles’ schools deep in the read

    Someone went to LA Unified.

  10. This is completely unfair. Sure, the cost of schooling has gone up far in excess of almost anything else, but look at the results.

    We have these superkids catapulting out of high school, sprinting through their college years, and immediately getting ultra high paying jobs where they are solving the worlds problems while funding this great country of ours through their happily offered taxes.

    Another unjustified slam piece.

  11. 5% decrease in teachers. 16% increase in administrators. Total = 5% increase.

    Something’s not right here

    (T0 + A0)*1.05 =T1+A1
    T0 * 0.95 = T1
    A0 * 1.16 = A1

    1.05*T0 + 1.05 * A0 = 0.95 * T0 + 1.16 * A0
    0.1*T0 = 0.11*A0
    T0 = 1.1 A0
    A1 = 1.16 / 1.1 / 0.95 * T1
    A1 = 1.11 * T1
    There are 1.11 administrators per teacher? No way. Even in the most bloated of bureaucracies do you ever have more admin per front line worker.

    I will believe that they are grossly mismanaged, but this is unbelievable. Some of these numbers just cannot be right.

    1. Well, if LA teachers were front line workers, you might have a point. But 1.1 to 1 seems about right for CA union jobs.
      I cannot refer to CA teachers as front line workers.
      Or as workers.
      Babysitters, maybe.
      Government drone form filler-outers, certainly.
      Democrat party cheerleaders, most likely.
      Zero tolerance so I don’t have to use any judgement believers, of course.

  12. Government, in most of its forms (think “Post Office”) has become a criminal endeavor, operated solely for the benefit of current, permanent employees secondarily and retirees primarily. Temporary employees, such as short term military personnel are a notable exception.

  13. the best way to combat the “pension problem” is to,1st, drop the union . Then change the pension plans to, for ex: $30 dollars per year of service, for every employee of the education industry. Limit the medical plans in retirement to retirees only. not their families. The same must be done to all city, state and federal employees. No one can retire before having 20 years of service which for the most part is what private employees get. No more tenure for anyone anywhere.
    BTW : F*CK DENIRO

  14. Really, we must engage in the problems of the nation! one day we will live in a better world!

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