Projected Deficit Dips for Schools : Education: Shortfall for L.A. district now at $130 million. Financial chief says board can balance budget without programs cuts or layoffs.

The chief financial officer for the Los Angeles Unified School District said Tuesday that the school system faces a $130-million shortfall for this fiscal year--less than the $150 million projected earlier--but should be able to pay its bills and close its budget gap without cutting programs or laying off employees.

In an interim financial report presented to the Los Angeles school board, school finance chief Robert Booker urged the board to cover the deficit by tapping into a $31-million emergency reserve account, deferring $87 million in payments to self-insurance funds and continuing a freeze on spending for classroom and district office supplies.

If the board adopts those measures at its next meeting next Tuesday, “this school system. . . .will finish the fiscal year being able to pay its bills,” Booker said.

But Booker said in an interview that such emergency measures as using reserves and other special accounts to pay the district’s bills must ultimately come to an end if the school system is to break a cycle that has forced it to start each of the last three years already in debt from the previous year.

Under California law, the district must have a balanced budget and is not permitted to carry deficits into the coming year. Board members must approve a plan to cover the projected shortfall by next Tuesday--the midpoint of the fiscal year.

The shortfall Booker announced Tuesday was $20 million less than the initial projection district officials offered last month. The school board already has slashed more than $275 million in order to balance the district’s $3.8-billion budget for this fiscal year.

The $130-million figure was based on the latest information on expenditures and income through December. A review of those figures showed that the massive school system had actually taken in $9 million more in income, and spent $8 million less on expenses, than stated last month, according to Booker.

Booker cautioned that the current figure could widen or shrink based on a number of variables, including lottery revenue and access to state funding.

He said district officials heard Tuesday that the state controller’s office is planning to impound $35 million in funding designated for districts with voluntary integration programs, which could add $15 million to the deficit. If that occurs, Booker said district staff would immediately have to consider more budget cuts.

Board members Mark Slavkin and Leticia Quezada expressed concern that the district was basing the projections on outside revenues that may not materialize and is setting itself up for yet another financial crisis in the months ahead.

“Our luck has been everything that can go wrong will go wrong,” said Slavkin, “At some point we have to wise up to that. It’s better to have a cushion.”