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Teachers' Strike Blew Another $500 Million Hole in L.A. Schools' Budget

That's on top of massive long-term debts for retiree health care benefits.

Even as the Los Angeles Unified School District (LAUSD) struggled with a $15 billion long-term deficit for retiree health care costs, the district was managing to operate with a small revenue surplus for the current fiscal year. That's important, of course, because you can't meaningfully address those long-term debts if you're running a budget deficit—just ask the federal government how that works out.

But the $55 million surplus that the LAUSD expected to have this year is now gone, replaced by an expected $131 million deficit this year and an estimated $547 million shortfall next year. The culprit? Concessions made to the district's teachers' union, United Teachers Los Angeles (UTLA), to end a six-day strike earlier this month.

The biggest fiscal change included in the new union contract is a 6 percent raise that teachers will receive over the next two years. The district also agreed to hire more school nurses and librarians, and to make an effort to reduce class sizes in junior and senior high schools. Together, the concessions will cost about $839 million over the next three years, according to the district's financial report on the new contract.

Even with additional funding from the state in the next few years—newly inaugurated Gov. Gavin Newsom has promised to boost school spending by $3 billion and to help defray districts' share of pension costs—the LAUSD is clearly not in position to be handing out raises. A task force that studied the district's fiscal condition in 2018 concluded LAUSD faces a structural deficit that "threatens its long-term viability and its ability to deliver basic education programs."

A major driver of the budget problems at the LAUSD is employee pension and health care costs, including the $15 billion unfunded health care benefit liabilities for current workers and retirees. According to the budget task force, those costs will consume more than half of the district's annual budget by the end of the next decade.

Additional hiring also seems to be a move in the wrong direction for a school district with a declining enrollment. The total student enrollment in LAUSD schools has dropped from around 700,000 in 2005 to just over 500,000 last year, according to the district's own comprehensive annual financial reports. Meanwhile, hiring has been on the rise. The LAUSD has seen a 16 percent jump in administrative staffers since 2004, and per pupil spending has been rising.

That's an unsustainable formula, and the district seems to acknowledge as much in its new financial report on the outcome of the recent strike and new contract with the UTLA. Additional state funding and a series of one-time budgetary transfers will allow the LAUSD to fund its operating budget for the next few years and, "it is imperative that the district adopt ongoing cost-reduction measures that will allow it to address the over $500 million deficit that remains in the 2021-22 fiscal year," the district's report concludes.

That might sound like it's the distant future, but it's actually just three years away—when the newly signed contract between the district and the union expires. And it sounds like layoffs will be coming.

The district will get another chance to set itself on a better path in three years—likely while facing an even more difficult fiscal situation—but, for now, it's difficult to see how accelerating the LAUSD's insolvency is in the best interest of teachers or students.

Photo Credit: John Lund Blend Images/Newscom

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  • loveconstitution1789||

    Poor Commifornia.

    Its almost like there was no way to predict these financial problems.

  • Brandybuck||

    You call it an unsustainable formula, but it is sustainable. We're talking governement here, governments can't go bankrupt! LA schools will keep caving to union demands forever. Eventually the state will ahve to take over (Gavin Newsome will LUUVE that) and state taxes will skyrocket to pay for LA. If it keeps going then the US will bail out California.

    This will continue to happen so long as voters imagine that spending can continue indefinitely.

  • Diane Reynolds (Paul.)||

    after the US bails out california, the UN will bail out the US. After the UN bails out the US, the Galactic Federation will bail out the UN. After the Galactic Federation bails out the UN, aliens will bail out the Galactic Federation.

  • Kevin Smith||

    Wait, why aren't the aliens part of the Galactic Federation? I mean, who is the Galactic Federation if not aliens?

  • DajjaI||

    The best thing these districts could do to reduce costs would be to stop diagnosing kids with fake diseases and disorders like 'adhd' and 'autism'. These are tremendously bureaucratically intensive and they only damage kids in the long run. In the case of 'autism' they teach kids there is something wrong with their brain (completely false) but this ends up creating school shooters and then they have to hire security at all the schools which is of course very expensive too. That's why hiring more nurses really annoys me. They will only pathologize the kids in endless ways. Kids generally are healthy and most nurse visits are unnecessary.

  • Brandybuck||

    Kids who won't sit still in a boring classroom are not diseased. Kids who daydream and "wander off" in a boring classroom are not diseased. Stuff like this is caused by normal childhood being interrupted by the needs of petty bureaucrats.

  • MiloMinderbinder||

    13.2% of the California school kids have at least one illegal alien parent, I would posit that the number is higher in the LA school district. That's an awful lot of teachers, aides, administrators, librarians, nurses, and custodial staff that shouldn't be needed.

  • a ab abc abcd abcde abcdef ahf||

    Paid for by property taxes whether legal or illegal.

    Sales taxes are also paid by everyone, immigrant or not, legal or not.

    I posit you are incoherent.

  • MiloMinderbinder||

    In my town (I don't live in CA), the per capita expenditure for K-12 schooling is just under $13,000, that number excludes capital expenses, interest, and pension contributions. The imputed annual property tax for the average 2-bedroom apartment in town is under $1000.

    As for sales taxes, the 4 largest expenditures that illegals make (rent, groceries, clothes and remittances) are all exempt from sales tax.

    So yeah, sure, illegal aliens do pay "some" taxes, but in no way come close to covering their cost. But what the Hell! We'll make it up in volume!

    To be fair US citizens and legal residents have to get up to about the 70 income percentile to "break even."

  • a ab abc abcd abcde abcdef ahf||

    So legal immigrants and native-born are also getting $13,000 worth of education and paying only $1000. Is that what you are admitting?

    You are a fucking economic illiterate.

    Everyone buys stuff, including immigrants, whether legal or illegal. That increased demand triggers increased supply. Or do you think all that stuff they buy just magically appears from taxpayer factories?

    What gives you the moral authority to steal my money to use to limit who I can do business with, or who I can be friends with? I know where the legal authority comes from -- same statist philosophy as every politician, whether mouthing platitudes or hatred.

    Fuck off, slaver. Get your fucking hands of my money and my life.

    If you want to not do business with immigrants, go ahead. But stop stealing my money to limit my options.

  • MiloMinderbinder||

    Yeah, I'd love to get rid of publicly funded education.

    But since that's not happening anytime soon the answer is not to bring in even more kids that I have to pay for.

  • MiloMinderbinder||

    As best I can tell the approved Open Borders position is since we have tax-payer financed K-12 education for legal residents we might as well have it for illegal residents too. Since we're already violating the NAP, let's shoot for the moon.

    I am wondering what is the Open Borders case against extending all gov't programs to immigrants (legal or ilegal). If the government is already taking my money for food stamps and section 8 and WIC and LIHEAP for citizens, and illegals are paying some taxes, then why aren't they entitled to benefit from these programs too?

    And why limit it to illegals? What about tourists, and students on visa? They pay taxes too. Let's give them food stamps!

    And why limit it to people who are physically present in this country. The price they pay for goods in their own country will include some small fraction that eventually goes into the US Treasury by way of the corporate income tax, so why aren't they allowed to benefit from US gov't programs that they are "paying" for?

  • MiloMinderbinder||

    All I asked was not to have to pay taxes to educate the citizens of other countries? Is that really an unreasonable request on an alleged "Libertarian" website?

  • JesseAz||

    Hey fucktard. The cost of educating an ESL student, which is estimated to be half of illegal immigrant children, is much more than the average student costs. It is estimated to be slightly over double. So those legal English speaking citizens are now subsidizing illegal immigrant children even more you.

    ABC stop proving how little you actually know on this subject. It is embarrassing.

  • loveconstitution1789||

    We don't call him the alphabet troll for nothing.

  • sarcasmic||

    If they pay rent then they're paying the landlord's property taxes.

  • MiloMinderbinder||

    Yeah, I mentioned that. The amount of property taxes doesn't come close to covering their costs.

  • a ab abc abcd abcde abcdef ahf||

    Neither do most other households. What point are you trying to make that singles out immigrants?

  • JesseAz||

    Illegal immigrants who have low education and work low wage jobs wont offset their costs to public services. I'm sorry that you're too fucking stupid to understand this ABC.

  • JesseAz||

    School budget isnt paid for by just property and sales taxes dimwit. Why do you pro open borders loonies ignore all fiscal issues on this topic?

  • Last of the Shitlords||

    Yeah a,phablet guy, they just pay for themselves, don't they?

    Nigga, please.......

  • JoeB||

    Percentage of illegals who pay property tax much lower than percentage in schools and incarcerated. I posit you are not thinking to hard about it.

  • MiloMinderbinder||

    Where's OBL when you need him? He'd come up with a cool hashtag like:

    #LibertariansForPayingToEducateOtherCountriesKids

  • esteve7||

    Get rid of pensions, they are a relic of the past and have no place in the public sector. Bunch of entitled brats who don't want to save for their future so they count on daddy to do it for them.

  • esteve7||

    Get rid of pensions, they are a relic of the past and have no place in the public sector. Bunch of entitled brats who don't want to save for their future so they count on daddy to do it for them.

  • Longtobefree||

    So we can make all the teachers do this during the summer, and all the funding issues go away!
    They can use the 'summer money' to fully fund their own pensions, and provide all needed supplies for the classrooms!

  • Brandybuck||

    teachers used to do this in the summer. It was a great gig. Teacher get paid a yearly salary, so the three month time off was still essentially paid for. It just gave them time for a nice summer job.

    Sucked for the kids though. Having to be with a teacher eight hours a day, then summer break came and the same teacher was now your boss for eight hours a day too! (Yeah, this was back when children younger than 24 actually had summer jobs involving labor and shit).

  • Diane Reynolds (Paul.)||

    I don't wanna hear it. Jerry Brown left California solvent and in the black. So black, it's blacker than vantablack.

    That's how black.

  • Rat on a train||

    Samples cannot be purchased by private individuals as the coating is subject to UK export controls.
    Damn. Plan B I guess.

  • Uncle Jay||

    I can't think of a better way to bankrupt a city, county, state or a federal government than to make laws ensuring public employees get very handsome retirement packages, healthcare benefits, etc.
    Congratulations all you public employee unions.
    You did what the Soviets, Japanese and Nazis couldn't.
    You help bring the USA and its states to its knees financially.
    I'm sure all the enemies of the United States, past and present, are so proud of you.

  • aajax||

    What was the role of charter school funding in all this?

  • AD-RtR/OS!||

    In a just world they'd just lay off enough teachers to recoup that $500MM.

  • Last of the Shitlords||

    Or harvest their organs.

  • buybuydandavis||

    Unions of government workers are just a shakedown racket. Democratic pols negotiate with Democratic pols to shake down voters.

  • tlapp||

    The key is the problem is 3 years away. After the next election. That is the time frame that politicians use, plenty of time to come up with reasons to blame the other side.

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