Deferral of Teacher Pension Funds Vetoed : Education: Cash-strapped L.A. and San Francisco districts wanted money for current needs. Governor denounces plan as irresponsible.

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Calling it a "one-time fix," Gov. Pete Wilson on Wednesday vetoed a bill to let the Los Angeles Unified School District defer payment of $88 million in state teacher pension funds to help cut class size and avoid the layoff of 1,900 teachers.

"In essence, this legislation would allow the school district to push its financial problems into the future," the governor said in his veto message.

"The teacher retirement fund is not a bank to which needy school districts can turn for contribution relief when times are hard," the message said.

Los Angeles school board President Warren Furutani said the veto pushes the district "back into the worst-case scenario.

"This wasn't a bailout, but it would have mitigated some of the cuts and given us some breathing room," he said. The money would have been used to fund an early retirement program to cut the district's payroll, hire back some young teachers laid off this year and reduce some class sizes, Furutani said.

The district had to lay off more than 1,900 teachers this year and put an average of three more students in each classroom to help close a $274-million gap in its $3.8-billion budget.

Authored by Assemblyman Dave Elder (D-San Pedro), the vetoed bill would have allowed the Los Angeles and San Francisco school districts to postpone paying the 8.25% contribution to the State Teachers Retirement System for six months, from January to June, 1992.

After that, they would have been required to contribute at the standard rate for six months, then start paying the retirement fund at the higher rate of 8.5% for the next 20 years. Elder said this formula would have prevented the fund from being jeopardized.

Officials said the Los Angeles district generally contributes about $10 million a month to the retirement fund. San Francisco would have saved an estimated $6 million had the bill become law.

Wilson charged that the bill failed to provide adequate "safeguards" that the diverted funds would be repaid and would have let school districts avoid correcting fiscal problems.

The bill also would set a "dangerous precedent" and could attract other school districts to seek a similar arrangement to obtain financial relief, the governor said.

United Teachers-Los Angeles (UTLA) President Helen Bernstein expressed disappointment but not surprise at Wilson's decision. "What he's saying is he doesn't have confidence in the Los Angeles school system," she said. "This would have been a one-time solution because the situations that exist this year aren't going to exist again. The state got into financial trouble and had to cut education to get out of trouble. And now we've lost a chance make an investment that would have let everybody walk out of here a winner, including the kids."

Bernstein blamed anti-union sentiment, in part, for torpedoing the deal since she and some district officials had hoped that a portion of the money would be used to avoid pay cuts for teachers and other employees.

"There's this kind of anti-union mentality that exists, and I believe that Gov. Wilson's advisers had the attitude that if in any way this helped members of UTLA, they didn't want to support it," Bernstein said.

Teachers were working without a contract while negotiations were under way, but talks stalled while the funding bill was awaiting action. The district has asked that the state appoint a mediator to help resolve the stalemate.

In all, about $120 million in concessions are being sought from employee unions as part of the district's package of budget cuts. The appointment of a mediator would be the first step in the legal process that would allow the district to unilaterally impose the cuts and could lead to a strike by teachers, who have said they are unwilling to accept pay cuts.

Elder's bill passed the Assembly by a bare majority vote of 41-30 to get to the governor's desk. It squeaked out of the Senate by a 22-6 vote, one more than the simple majority required in that house.

It takes a two-thirds vote of both houses, or 54 votes in the Assembly and 27 votes in the Senate, to override a gubernatorial veto.

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