A Hundred Million Reasons to Worry : Coming up a bit short--$150 million--L.A. schools face a growing nightmare

Somebody has some explaining to do. After months of slashing inside and outside the classroom to compensate for a $275-million shortfall, the Los Angeles Unified School District now faces an additional projected deficit of as high as $150 million! What happened?

A top district official blames the huge new shortfall on a lingering recession that has cut deeply into state revenues, a further decline in lottery ticket sales, a dip in interest rates that could not have been predicted and some major miscalculations. Losses from a sagging economy, delayed retirements, lost reimbursements because of administrative costs and minor miscalculations add up to about $40 million--an understandable figure given the size of the budget. What about the rest?

For instance, how could district officials have failed to foresee a $27.7-million increase in health and medical benefits? Of course, inflation and increased use pumped up that bill. But what about the extra cost attributed to full benefits being provided for laid-off teachers who took jobs as substitutes? Certainly much of that expense should have been foreseen. During these gloomy times, how could accountants have expected an additional $33 million in cost savings ? And why was an additional $25 million outlay for substitute and regular teachers unpredicted?

The school board has hired outside auditors, who made an oral report Wednesday at a closed board meeting; the report should be discussed in public.

This latest budget gap clearly threatens a system that has cut deep into the bone. What choices are left? The teachers have a contract that cuts their pay 3% to fund a loan to the schools, so the board can’t ask to “borrow” any more money from employees--although it can take money from reserve accounts or the self-insured funds. The state government also has a worsening budget problems, so the district can’t expect Sacramento to bail out the schools.

Will this huge new deficit force the board to stuff even more children into already crowded classrooms and cut deeper into a system that does not have enough classrooms or supplies?

As the red ink and uncertainty grow, how can the Los Angeles Unified School District overcome this latest credibility gap? How can the school board reassure wary parents who already worry that their children are getting shortchanged in Los Angeles’ public schools?