L.A. Unified Supt. Michelle King will present the school board with her proposed $7.9-billion budget plan at a meeting that is expected to stretch well into Tuesday evening. The school board is scheduled to vote on the plan next week.
Here are five things to keep in mind about the proposal, which arrives on the heels of a bruising school board election in which several candidates accused the district of ignoring coming budget problems.
1. District enrollment is expected to continue to decline
L.A. Unified enrollment has been declining since 2003, in large part because of lower birth rates and charter school growth in Los Angeles. The decline is expected to continue, which will affect the district’s finances because funding follows students in California.
In district schools, L.A. Unified expects to see enrollment drop by 33,899 students, or about 2% a year, over the next three years. Meanwhile, independent charters are expected to see an enrollment boost of 11,129 students over the same period.
2. A deficit is two years away, maybe
In 2015, an independent panel warned that by the 2017-18 fiscal year, the nation’s second-largest school district likely would have a deficit of $333 million, that would then balloon in two more years to $600 million.
King’s budget rejects these grim projections. Thanks to higher than expected revenue from the state and a positive balance carried over from this year, King expects to finish the next two fiscal years in the black even as the district’s fixed costs continue to climb. In a letter to board members, she wrote that under the proposed budget, she will have enough money to expand the number of magnet schools — a key element of the district’s strategy to boost enrollment.
School officials believe they can postpone a deficit, but only until 2019. They say the deficit could be about $422 million that year.
Proposals to eliminate that deficit are vague and nowhere near being adopted. One would have the district stop paying into a trust fund it set aside to cover retirees’ healthcare, which would only kick L.A. Unified’s financial crisis a little farther down the road. Another suggests raising class sizes by four students in grades four through 12, which would allow staff to be cut by about 1,000 full-time employees.
3. King's budget doesn't address rising pension, retiree health costs
Even though funding for schools has risen, money remains tight. That’s largely because of built-in costs, which keep growing.
On the upside, L.A. Unified has been a huge beneficiary of state outlays to school districts. Voters extended a tax increase that benefits schools. The state also gives more money to districts with high numbers of low-income families, students learning English and foster youth. Together, those groups make up the vast majority of L.A. Unified students.
But the state is giving with one hand and taking away with the other. The district has to pay the state an increasing amount to fill underfunded employee pension reserves, which are managed at the state level. L.A. Unified also has its own shortfall. It needs about $13.6 billion more to pay for the lifetime health benefits it promised to long-term employees.
The problem is likely to get worse because L.A. Unified has an older workforce and the number of retirees drawing on the system is expected to rise sharply.
4. L.A. Unified is top heavy and it could be penalized for it
The district’s hiring of administrators has long been the subject of dispute. Among large California school districts, it has one of the highest administrator-to-teacher ratios. And the ratio has been increasing annually.
Critics say the district has filled its ranks with well-paid assistant-to-the-assistant types, which it can no longer afford. The district has defended its ratio of administrators to teachers by arguing that many of these employees are on the ground in high poverty schools, where they are needed in greater numbers. King has also said she plans to reduce the size of the central administration, mainly through attrition.
King’s budget considers the real possibility that L.A. Unified’s ratio could surpass the state’s limit, forcing an already cash-strapped district to pay a penalty.
5. Some groups are still accusing L.A. Unified of misspending money
Several years ago, Gov. Jerry Brown took advantage of a recovering economy to redistribute state education funding. One result was a process full of acronyms and jargon. Another is that L.A. Unified and other school districts with large numbers of low-income and “at-risk” students receive ongoing additional funding.
The catch is that the new money has to be spent to help these students directly. Activists sued the district, accusing it of spending about $450 million of that earmarked money on general operations and services that benefit all students, not just those in the targeted groups.
The district now receives more than $1 billion a year in this additional funding, and critics remain unhappy about how the money is being spent.
The issue may come to a head in the 2017-18 budget.
Although district officials say they will be spending their extra money as the state intended, getting a clear read is difficult. L.A. Unified, for example, plans to use some of it to support dual-language programs, designed to make students fluent in a foreign language. But dual-language programs also benefit some middle-class students who are not in the targeted groups, and many of the programs were established long before the new funding arrived.
2:30 p.m.: A previous version of this story said that the budget proposal totaled $7.9 million. It is $7.5 million.
This article was originally published at 4 a.m.