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Pensions, Administrative Bloat, and the Success of Charter Schools Are Driving the Los Angeles Public School System Towards Insolvency

The school district points fingers at charter schools instead of trying to slim down and compete, a new report says.

Ingram Publishing/NewscomIngram Publishing/NewscomThe Los Angeles Unifed School District has lost more than 245,000 students in the past 15 years—so many that, if you gathered them all together, they would be one of the 10 largest school districts in the United States.

Where are they all going? Many to the city's charter schools, which have exploded in both popularity and effectiveness. But the migration to better alternatives has left taxpayers paying ever higher amounts to an education system that is educating fewer and fewer students. On the current tragectory, the school district will face a $422 million shortfall by 2020, driven in large part by its $15 billion in unfunded health care benefit liabilities for current workers and retirees.

The district has been happy to blame the charter school exodus for its ongoing financial problems, but a report released Wednesday by the Reason Foundation (the nonprofit that publishes this blog) examines the district's structural deficit, which is "forged from hiring surges, burgeoning and unaddressed pension and benefit obligations, unadressed low attendance, overextended facilities, and antiquated management and financial structures."

No wonder more parents and students are leaving for charter schools and other alternatives. Charter school enrollment in Los Angeles has more than doubled since 2010, and another 41,000 students are on charter school waiting lists.

But while student enrollment has declined by about 10 percent, the LAUSD has seen a 16 percent increase in non-teaching administrators.

Source: Reason FoundationSource: Reason Foundation

Rather than blaming charter schools—or, worse, taking steps to limit students' ability to leave—the school district should right-size its operations to better serve the students left behind. To do that, the study suggests an overhaul of the district's long-term debt obligations, a reduction of staff, strategic school closures to minimize overhead costs, and giving principals of individual schools more authority over their budgets.

None of this should come as news. Many of these problems and some of these solutions were outlined in a 2015 report by the district's Independent Financial Review Panel. For example, if employees and retirees had to cover just 10 percent of their health insurance premiums, the district could save $54 million annually.

Three years later, the problems have only gotten worse—and the Independent Financial Review Panel's suggestions have only gathered dust.

"The days of district monopoly and residential assignment have given way to parent choice, forcing public schools to compete for students—a real win for families," write the authors of the Reason Foundation report. "Rather than casting blame, the LAUSD needs to recognize that the structural deficit demands immediate attention."

Photo Credit: Ingram Publishing/Newscom

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  • Citizen X||

    Rather than blaming charter schools—or, worse, taking steps to limit students' ability to leave—the school district should right-size its operations to better serve the students left behind.

    Of course, that assumes that the primary goal of a school district is to serve its students, rather than to keep current and former school district employees in the lifestyle to which they would like to be accustomed. There is no evidence that this is true anywhere.

  • chemjeff radical individualist||

    This is the one area where I think libertarian arguments and libertarian efforts can do the most good.

    People have choice for most everything else in their lives, why shouldn't people have choice when it comes to the schools their kids attend? That is not a difficult sell, and people are evidently buying the argument very readily in places like Los Angeles.

    There is so much possibility available for types of educational experiences once the government monopoly on education is smashed.

  • Get To Da Chippah||

    Because some people might choose to put their kids in schools that teach creationism, and that up is down and all other sorts of vile nonsense, instead of learning how all white people are to blame for everything, communism is better than capitalism, and the good kinds of up-is-down lessons one learns in the right universities.

  • BestUsedCarSales||

    And I also believe that the long term pay-off of school choice, and individual liberty is the highest. The current government monopoly is a system that is designed to teach children to continue that monopoly. You have to almost be a rebel to get out of school without becoming doctrinaire in many ways.

  • Hugh Akston||

    Is there a voucher system in place for charter schools in LA? How could they be losing money just because their enrollment is down? I thought various taxes paid for public schools.

  • Scarecrow Repair & Chippering||

    I believe a lot of schools are paid per student in attendance each day. That is why they hate truants and make such a fuss over parents taking kids out of school to go on a vacation.

  • Hugh Akston||

    Ah, much the same way that prisons are funded on a per-inmate basis. Odd how similar the two systems tend to be.

  • Longtobefree||

    Yeah; everybody inside wants to get outside

  • Diane Reynolds (Paul.)||

    Then where are the savings going?

  • JesseAz||

    Because 15% of school costs go to pay people who no longer work for the school system. The less kids currently enrolled in that system means an increase per student in costs for people no longer actually serving students.

  • ||

    I like the use of the word stanching to imply that LAUSD has been exogenously wounded as opposed to knowingly walking itself into a fiscal woodchipper.

  • H. Farnham||

    My wife is a public school teacher (rural Kansas). She described a staff meeting to me a couple years ago where they were discussing how to deal with "lack of funding". My wife (in her first year at the school) asked why they didn't consider consolidating with the town seven miles away. Several of the other staff were quick to emphatically note how that would probably result in one of the high schools being closed, and that would effectively kill the town that relies on the school system for economic viability. My wife then asked them something along the line of... "if the town can't exist without the government propping it up, then what's the point of it being there anyway?" Needless to say, things got very awkward and quiet until someone changed the subject.

    School systems function just as much as jobs programs and redistribution vehicles as they do as educational institutions.

  • I'm Not Sure||

    "redistribution vehicles"

    Yep.

    Taxpayers -> Teachers -> Unions -> Politicians

  • Longtobefree||

    Please post tomorrow and let us know where your wife's new job is - - - - - - - -

  • lap83||

    I live in Kansas too and it surprises me how little people seem to question the efficiency of their schools. I'm from MN which is a blue state but there seemed to be more of a public debate. In Kansas, which is supposed to be so red, it seems accepted by everyone that the schools need more money and that nothing should be done other than to throw more money at it. (with the main contention among Dems being that Republicans don't throw enough) But no real solutions. So there are districts with fewer than 100 students and maybe 10 graduating a year. But they can't possibly consolidate districts!! Why do you hate children?!? Are you F'ing kidding me?

  • lap83||

    In fact, I went to a high school in MN that was the product of consolidation 30-40 years ago. There were no ill effects as far as I know, the school has consistently had a high graduation rate and good test performance scores.

  • H. Farnham||

    It's frustrating as all hell, especially the ongoing battle between the legislature and supreme court over school funding the last few years. I hate to admit it, because I love my state, but Kansas is a hotbed of Republican Progressivism.

  • H. Farnham||

    To clarify, "I love my state" means 'I love my homeland', not 'I love my political entity'

  • loveconstitution1789||

    Many Democrats joined the GOP years ago. We call them RINOs but they hide among the Republicans.

  • H. Farnham||

    I don't bother trying to find any meaningful differentiation between Republicans, Democrats, RINOS, DINOS, etc. I just call them all collectivists.

  • Scarecrow Repair & Chippering||

    When asked how a libertopia can replace an existing coercive state, this is the only answer I can think of -- people would pledge to only use a libertarian redress system against others who have signed the pledge, and in the fantasy, it would take decades at least, but eventually some critical mass would have signed the pledge and the government legal system would founder for lack of participants. Suppose the unimaginable did happen, and 90% of the populations refused to use the US court system. Of course they'd still defend themselves there if prosecuted, and cowards who pledged and used the state court system anyway against fellow pledgers would be shunned.

    It's my fantasy, and I'm sticking with it.

  • gormadoc||

    My fantasy involves space prostitutes, but you do you.

  • BestUsedCarSales||

    How many rows and columns of breasts do these space prostitutes have?

  • Telcontar the Wanderer||

    Surely "an inadequate number" is sufficiently reliable as a projected answer that you need not bother asking at this point.

  • I am the 0.000000013%||

    After the minimum has been reached, placement becomes a more important consideration

  • Telcontar the Wanderer||

    "Minimum". Heh.

  • esteve7||

    Yes it's always the success of the market that you have to blame. You know, like why they had to shoot people fleeing East Germany to West Germany....

  • DenverJ||

    That's actually a good idea! If they shot all the children trying to go to charter schools, I bet the problem would resolve itself fairly quickly.
    Also, I recently accepted a job offer from a charter school, starting end of July.

  • BestUsedCarSales||

    Congrats.

  • Longtobefree||

    This probably can only be done after the three state thing - -
    Fire all the non-teachers except for one principal and one secretary per school.

    Guess I lack imagination, but with all the illegal border crossers, DACA kids and all that, why is enrollment down again?

  • buybuydandavis||

    "But while student enrollment has declined by about 10 percent, the LAUSD has seen a 16 percent increase in non-teaching administrators."

    Pournelle's Iron Law of Bureaucracy

  • Sevo||

    "Pensions, Administrative Bloat, and the Success of Charter Schools Are Driving the Los Angeles Public School System Towards Insolvency"

    "How Gov. Brown Ruined California in His First Term"
    [...]
    "The Educational Employment Relations Act of 1976, established collective bargaining in California's public schools and community colleges
    The Ralph C. Dills Act of 1978 established collective bargaining for state government employees
    The Higher Education Employer-Employee Relations Act of 1979, extended collective bargaining to the state university system.
    California schools and taxpayers are perpetually in the hole because of Brown's idiocy decades ago.
    https://finance.townhall.com/columnists/
    mikeshedlock/2012/05/15/how-gov-brown
    -ruined-california-in-his-first-term-n922983

    Fucking moonbeam didn't get the name for nothing.

  • CDRSchafer||

    Here in Texas, we have the choice of four public charters and the traditional public school. The traditional public school is the last choice of most parents. The charter schools operate with 80% of the per pupil traditional public schools receive and still do a better job. Even though we all have to drive our children to school (no buses like the public school) we do it to make sure our children have a better education.

    There should be a plan to phase out traditional public schools in areas where charters are thriving.

  • I am the 0.000000013%||

    Ah, the alliance between unions and government. Is there anything they can't do?

  • BILKER||

    Ono of the best ways to reduce expenses is "pensions". these should not be full salaried payments to retirees. like most other workers pensions s/b base on "x amount per year of service". for instance only retirement granted to 20 years and over at a fixed dollar amount per year of service say $50.00 x 20 years would be $1000 a month instead of 1/12 of their final or highest salary prior to retirement which in some cases can be as high as $300,000 a year.
    BTW F*CK DENIRO

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