The Los Angeles Unified School District could soften the drastic pay cuts facing employees by slashing nearly $100 million more from its already-pared budget, an independent commission reported Tuesday.
Former state Atty. Gen. John K. Van de Kamp, who headed the special panel, presented a report to the Board of Education that concluded that more than $94 million could be saved through measures ranging from reducing employee absenteeism to putting a freeze on spending for instructional materials.
But even with such cost-cutting measures, Van de Kamp cautioned, some salary cuts will be necessary for the district to survive its fiscal crisis.
"We do not believe that it is necessary to impose the drastic salary cuts envisioned," Van de Kamp told the board. ". . . The bad news is that salary cuts from 1991-92 actual levels will be necessary to balance the budget."
The commission's recommendations are the latest attempt to deal with a budget crisis that has caused unprecedented tensions within the nation's second-largest school system. The proposed pay cuts are believed to be the deepest planned by any district in the nation.
To avoid layoffs and save programs, officials proposed in June to cut employee pay by $247.3 million to help make up a $400-million shortfall in this year's budget. Furlough days imposed on employees last year would pare an additional $23.6 million from salaries.
To have the least impact on the lowest-paid workers, officials proposed that the cuts range from 6% to 16.5%. The reductions, to be achieved through a combination of unpaid days off and salary reductions, would be in addition to a 3% pay cut imposed on the district's 58,000 full-time employees last year.
The Van de Kamp panel, formed three weeks ago to assess the district's financial condition, concluded that the district got into trouble in large part because of a 24% pay raise over three years that was instituted for most employees in 1988. The commission offered several recommendations for immediate cuts that could lessen the pay reductions, as well as longer-term suggestions on how to save money and raise revenue for the school district.
At least $38.4 million could be saved by reducing the money budgeted for health benefits, workers' compensation and insurance claims, the six-member panel said. "That should not be too tough for good administrators," Van de Kamp said. "We need to force that discipline."
The report suggested that creating a bonus and incentive plan for employees who assist in reducing expenses would help achieve cost control and ease the pain of any cuts.
For example, the commission said the district could save $13 million by implementing programs that encourage employees to use less than the maximum sick leave allowed. Employees could be encouraged to take less time off by letting them roll over sick days to the next year, and the district could use any savings for year-end bonuses. The report also recommended a freeze for the rest of the year on using general district funds to buy instructional materials. Other cost-saving measures included reducing the budgets for utilities and for teachers who perform administrative duties.
The independent panel was formed by the Los Angeles Educational Alliance for Structuring Now, a school reform coalition, to help ease the turbulent negotiating process between the district and its employees.
The school district has already implemented or factored into budget plans some of the cost-saving tactics cited in the report, such as imposing a districtwide hiring freeze, which the panel believes could save about $20 million. The district is also proposing changes in employee medical coverage that could save $24 million.
School board members praised the commission's efforts and said they plan to review and discuss the recommendations this week.
"We'll do everything in our power to (implement) those recommendations from the commission that are legal and feasible," said Supt. Bill Anton, "because we are looking at every way we can to survive this fiscal crisis."
But board member Roberta Weintraub noted that she and her colleagues have to proceed with caution. "It's an awesome responsibility given the consequences of not making the right decision," she said.