Plans Laid for School Layoffs, Program Cuts to Meet Shortfall : Education: With a potential $137-million deficit, it is the fourth straight year that the L.A. district has faced financial crisis.

Faced with a potential $137-million budget shortfall next fiscal year, Los Angeles school officials Monday began laying the groundwork for widespread layoffs and educational program cuts they intend to make by the end of June.

Although Supt. Sid Thompson has not offered recommendations for specific budget cuts, he said at a special school board meeting that “there is no way we can avoid layoffs,” and there will be “no way to keep the effects of the cuts from being felt at the school level. . . .. The problem is of that magnitude.”

This will be the fourth straight year that the district has been confronted with unprecedented budget shortfalls. The deficits have forced the school board to slash more than $800 million from Los Angeles public schools, prompting employee salary reductions, increased class sizes and the elimination of many extra activities such as music and drama programs.

Thompson said he is not ready to say how many district employees will lose their jobs but that the cuts will be spread throughout the district’s 55,000 employees. He said his decisions will be guided by a district-ordered management audit expected to be completed in early May.

Already, the district has notified about 1,800 administrators by mail that they may lose their jobs or be reassigned. Last week, such notice was mailed to 500 librarians, attendance counselors, nurses and elementary school music teachers. Probationary teachers and those who work under emergency credentials are also susceptible to job losses.

Thompson also issued a 12-point priority list that he plans to use to shape his recommendations for budget cuts, which are to be presented to the board April 22. He said he intends to eliminate district services that have “previously suffered so many cuts as to make them ineffective,” give schools as much notice as possible about layoffs and “ensure that student needs are considered.”

Several school board members, noting that district reform measures are moving toward giving schools more decision-making authority, suggested that principals be given choices on how to take the cuts.

Thompson said he will meet with staff to discuss the issue.

In keeping with the terms of a recently forged contract settlement with teachers, the district will not lower employee salaries, which will account for 84% of the district’s $3.2-billion general fund for the 1993-94 fiscal year, Thompson said.

The total projected budget for next year is $3.8 billion, which includes funding for federal programs such as student meals, state construction and interest on district loans.

Jones told board members that they have limited options when it comes to program cuts from the general fund budget. Likely targets are summer school, adult job training centers and child-care facilities. But some of these programs must provide a minimal level of service under state education codes and cannot be eliminated.

If the shortfall was to be made up by eliminating jobs, between 3,500 to 4,000 employees would be laid off, Jones said. But because programs are also on the chopping block and layoffs cannot be imposed to pay for the teachers’ contract settlement, the number of job losses will be smaller.

The contract--drafted by Assembly Speaker Willie Brown (D-San Francisco), who mediated the protracted dispute--calls for a 10% instead of 12% salary cut for most employees. The 2% restoration is to be paid for with federal funds that Brown hopes to secure for the district and with money from restricted textbook and school materials accounts. Special state permission may be needed before the district can raid such special funds.

The shortfall for the fiscal year, which begins July 1, is based on state education funding remaining steady. It has come about because of the $36-million cost of the teachers contract, a $38-million payment for workers’ compensation and insurance liability that was skipped this year, $36 million for inflation, a $20-million loss of onetime funds, and $7 million to pay for a sick pay incentive and substitute teacher program.