Schools May Raid Funds for Contract : Education: Board seeks to use $60-million in reserves and restricted accounts to cover shortfall. Some of the money would be used to restore 2% in teacher salary cuts.

Confronted with a potential $60-million midyear shortfall, the Los Angeles school board said Monday it can only make good on a contract promise to restore 2% in teacher salaries this year by virtually wiping out restricted accounts for textbooks and school supplies.

Originally, district officials believed that they would not have to spend the restricted account money. Instead, through bookkeeping shifts, they had planned to designate the money as part of their general fund. But under a budget plan approved Monday, they must move swiftly to raid the accounts.

The bulk of the shortfall--far more than the $7.4-million deficit projected in January--includes the $36-million cost of settling a contract with teachers and another anticipated $24-million decrease in state funding and other losses, including reduced revenue because student attendance has been lower than expected.

Under state law, the district must end the school year in the black and must present a midyear plan to the County Office of Education showing a financial plan to achieve that. The law also requires county Supt. Stuart Gothold to review the district’s budget plan and appoint a fiscal adviser if he determines it is not sound.

Under the budget document approved Monday, the district intends to make ends meet by depleting its $30-million emergency reserve fund and seeking a waiver of state education codes to use another $30 million in restricted funds.

“We are talking about using funds that are not people funds, they are book and supply funds,” Supt. Sid Thompson said, adding that terms of contracts with other employee unions prohibit the district from laying off others to fund the contract settlement with teachers.

Thompson said the district will not be able to meet the terms of a contract settlement with teachers, which calls for a 10% instead of a 12% salary reduction--until the waivers or other state legislation are approved.

Asking for the waivers portends to be a controversial request because several influential members of the Legislature and Gov. Pete Wilson’s top education deputy have said such a move may be illegal and not educationally sound.

Assembly Speaker Willie Brown (D-San Francisco), who forged the contract settlement between the district and its teachers union, came up with the risky plan to use emergency and textbook funds. However, he has said dipping into the restricted accounts should be a last-ditch effort.

Rick Simpson, Brown’s chief education aide, said Monday that the majority of the state funding deficit, $15 million, could still be made up and that the state probably will reimburse the district the total amount by the end of the fiscal year June 30. He said it may not be necessary for the district to use the textbook accounts.

“The district appears to be taking the worst-case view of things,” Simpson said. “They are saying they need to get the waivers based on the assumption that the current situation is going to continue for the rest of the year.”

In a letter to Simpson on Monday, Thompson said the budget document approved by the board “in no way alters our commitment to the Speaker’s settlement proposal.”

United Teachers-Los Angeles President Helen Bernstein said that the financial arrangement “does not bother me. . . . The board voted to reduce our salary cut, and they owe us that money. If they break a contract, we will sue.”

Top district and teachers union leaders are scheduled to meet with Brown this afternoon to discuss the final contract language and the next steps to be taken to ratify the contract. Thompson also will present a list of disputed contract issues dealing with empowering teachers to choose class assignments by seniority rather than by the judgment of principals. Under terms of the proposed settlement, Brown is the arbiter of any settlement.

In another bleak budgetary decision, the board has officially informed 507 librarians, elementary music teachers, attendance counselors and school nurses that they stand to be laid off or reassigned next school year because of an anticipated $100-million shortfall in 1993-94.

The final decision on whether they will lose their jobs will be made during the budget-planning process that begins this month.

More than 100 of these employees packed the school board hearing room to protest the proposed cuts, which would eliminate all 126 school librarians in the district and all 79 elementary school music teachers. The proposal would also cut 79 school nurses.

“If these cuts are made, the students of this district will no longer have access to a librarian,” said Beverly Taylor, a librarian.