Schools Face New Deficit : Education: Finance director says L.A. district will be at least $258 million short. He calls for increased state aid to avoid cutbacks and restore salaries.

Nearing the end of a school year that forced hundreds of millions of dollars in budget cuts, the Los Angeles Unified School District’s chief financial officer said Thursday that the district faces another huge deficit next year--at least $258 million--unless state aid is increased.

In a presentation to the Board of Education, district finance Director Robert Booker said the figure is the minimum the district must receive in additional state support to avoid another budget shortfall and to make up for salary and reserve account cuts imposed to offset deficits incurred over the last two years.

“We’ve been able to utilize reserves and onetime funds to keep ourselves alive over the fiscal years,” Booker said. But “it’s gotten to the point we’ve stripped away the shock absorbers and therefore we’re facing a tremendous budget problem for next year.”

The projected budget gap includes $75 million to reimburse payments deferred since 1990 from the district’s self-insurance account, $59.9 million to restore and increase an emergency reserve account drained by past deficits, and $98.5 million to partially pay back a 3% pay cut and restore the salaries of employees throughout the district to 1990-91 levels.

Booker added that the estimated deficit will increase because itdoes not include inflation or take the impact of the governor’s proposed state budget into account. He said that with the state facing its own potential $5.2-billion shortfall, it is unlikely that the district will be able to receive additional funding from Sacramento. Without an increase in basic aid or other funds such as the lottery, “the deficit is going to be substantial.”

Thursday’s meeting--the first step in assessing what will be the district’s budget for the coming school year--comes on the heels of a financial crisis that has staggered the district for four consecutive years. More than $760 million has been cut from the district’s nearly $4-billion budget in the last three years, affecting virtually every facet of the system’s operation.

Within months of having to make $275-million in budget cuts this fiscal year, school board members found themselves faced with an additional $130-million shortfall in January that forced them to freeze school spending and tap the district’s self-insurance and reserve accounts.

In the wake of the latest deficit, the board took the unprecedented step of reprimanding and suspending more than a dozen of its top fiscal managers, including Booker.

In an apparent allusion to the disciplinary measures, Booker told the board that “I certainly don’t attribute it to miscalculations and errors on the part of my staff and I believe the record will speak for itself.”

Booker went on to note that 87% of the district’s budget goes to personnel costs, such as employee salaries and benefits. “It leads me to the conclusion we’re going to have to look at reducing personnel costs.”

Booker gave several examples of possible cuts. If kindergarten teachers were required to teach more than one session a day, 1,088 positions could be eliminated and the district could save $33 million, he said. A districtwide reduction of employee salaries by 5% could save another $105 million, he said. Having secondary school instructors teach for six periods instead of five could eliminate 1,500 positions and save $45 million.

Board member Leticia Quezada suggested that the board may need to renegotiate union agreements to restore salaries to 1990-91 levels.

“It seems the board needs to go back to the renegotiating level and say this is not a reality,” Quezada said. “There’s no way we can pay back $87 million when we’re considering salary cuts. I know it’s an unpopular thing to say. But frankly, I think it’s real and honest.”

Day Higuchi, vice president of United Teachers-Los Angeles, disagreed. “The amount of money our salary pay back involves is small compared to the magnitude of the problem. That’s an easy scapegoat kind of thing to point at,” he said.

Meanwhile, Supt. Bill Anton met with members of the Black Leadership Coalition to discuss the group’s concern that black administrators are being unfairly blamed for the district’s longstanding financial problems.

“We wanted to let him know that while we’re not trying to protect individuals who may have some responsibility for making errors that led to this problem, we don’t want to see any particular group disproportionately singled out,” said Joe Hicks, head of the Southern Christian Leadership Conference, one of the groups represented by the coalition.

Hicks said Anton declined to discuss specifics of the administrative discipline, “but he did try to allay our fears that there was discrimination in terms of the way the reprimands were handed out. . . . The process still seems to be cloudy as to how these individuals were singled out and to what degree the board must also be held responsible.”

Times staff writer Sandy Banks contributed to this story.