District, Union Disagree on Funds Available for Salaries

How much money does the Los Angeles Unified School District have that could be used to increase teachers’ salaries this year?

District and union officials have widely divergent opinions.

United Teachers-Los Angeles officials say the district has a surplus of at least $136 million in various accounts that could be used to pay for increasing the district’s wage offer to teachers. The union says it has found $40 million in a cafeteria fund, $26 million in self-insurance accounts and $70 million in accounts for books and supplies that the district did not spend last year.

For example, last year the district budgeted nearly $23 million for textbooks but spent only $14.3 million. In the current budget, it has reserved $24 million for textbook purchases.

Similar examples appear “year after year in certain categories,” said John Britz, UTLA’s chief negotiator, who has studied the district’s financial records. “They budget large sums of money, but at the end of the year they spend 40% or 50% of what they budgeted. Then the following year they budget large sums of money again. An independent auditor would raise questions whether that kind of practice is proper.”

Robert Booker, the district’s chief financial officer, said the district began the 1988-89 fiscal year with $490 million left from the previous year, a typical beginning balance. The total budget is about $3.5 billion this year.

The board has designated that $85.4 million of the $490-million surplus be used to help pay for higher salaries. This was the whole amount left over in the general fund last year that was not earmarked for a special purpose.

Rest Restricted

The rest of the money, Booker said, is restricted--either by state law or district policy--and cannot be reallocated to pay for other expenses, such as raises.

The textbook money, for instance, comes from the state with the specific restriction that it be spent only on purchasing books, Booker said, and state Department of Education fiscal experts confirm this. The large amount left over at the end of the last fiscal year was to pay for books that had been ordered but not yet received, Booker said.

“We have no option with respect to spending the money for items other than those specified in the state allocation. There is no advantage to the school district to hold back money for textbooks,” he said.

Department of Education officials say that state regulations clearly prohibit districts from spending textbook, cafeteria or insurance money for any other purpose, even if the money was raised through local sources.

However, nearly $70 million of the $490 million left from the previous year is money that the school board, not the state, controls and could theoretically be reallocated for salaries. The district said all of the $70 million is needed for such expenses as maintaining the district’s reserves for economic uncertainties and for paying legal claims.

In addition, about $34 million in state lottery funds were left over from last year and will be used for salaries, Booker said. This year, the district expects to receive $79 million from the California Lottery. This year’s projection is based on an expected state allotment of $126 per student, of which about $18 will go directly to schools to spend. The remaining 85% will go toward employees’ salaries, Booker said.

The union said the district’s $126-per-student projection is too conservative and that it is likely that lottery revenues will be higher.

Another potential source of money for teacher salaries could be the district’s allotment from Proposition 98, the initiative approved by voters that would give schools a fixed portion of the state budget. The Los Angeles district’s share could be at least $26 million, but it is uncertain when the money will be made available.