Funds Pursued to Avert Teacher Strike : Education: L.A. district applies to state for $32 million in unused desegregation monies that could free other income to finance settlement reached with union.

The Los Angeles Unified School District may be able tap into $32 million in unused desegregation funds to pay for its contract with teachers this year, averting a legal challenge that threatens to derail the pact and lead to a strike next month.

At the prodding of Assembly Speaker Willie Brown, district officials are applying to the state controller’s office to recoup the money, which was budgeted in 1991-92 to help pay for costs associated with the system’s busing program. The district failed to qualify for the money because it could not come up with the required $6.4 million in matching funds.

State Controller Gray Davis, whose office must decide whether the district is eligible to receive the money, said the district has not yet filed its request.

“I’d be willing to bet that they’re entitled to money, but it would be impossible to say how much until I see the claim,” he said Tuesday.

The district plans to apply the money to security costs associated with its busing program--costs paid out of unrestricted general fund money and not claimed as a desegregation expense, district officials said.

“The district is entitled to claim that portion of security costs which is legitimately connected with court-ordered desegregation,” Davis said. “That money could be directed toward the cost of security personnel and other attendant costs. Then they could presumably back out money currently appropriated for that purpose and use those funds to pay the teachers.”

The contract settlement--negotiated in February by Brown after the district and union deadlocked on contract terms--would cost the district $36 million this year because it reduces from 12% to 10% the size of the cumulative pay cut teachers received.

But the settlement was temporarily blocked Monday by Superior Court Judge Diane Wayne, who upheld a claim by the Howard Jarvis Taxpayers Assn. that the contract violates state law and the state Constitution because the district has no money to fund the deal in its budget.

Wayne set a May 5 hearing to determine whether the district can afford the contract or whether it must make it conditional upon finding more funds. If the contract is not upheld, teachers union President Helen Bernstein said the district’s 30,000 teachers will likely walk off the job May 7.

But Davis and district officials said it is likely that the district can recover some additional money before the deadline.

“I intend to assist the district in any legal way possible in recovering money to which they’re entitled,” Davis said. “The last thing anyone wants to see is a strike after the district and teachers went to considerable lengths to act responsibly in resolving this.”

Brown identified the desegregation account as a possible source for additional funds during conversations this month with county and district school officials.

School officials said the $32 million would cover most of the costs associated with the contract, and the rest could be made up through smaller pots of funds, including about $6 million generated by a projected increase in lottery revenue and $6 to $9 million the district may be able to recover from the state in attendance income.

Bernstein on Tuesday criticized district officials for dragging their feet in seeking the additional funds. “If they had spent half the amount of energy on getting the money that they spent on trying to undo the contract and change the language, we’d have avoided this court process and all the pain it is inflicting on teachers,” she said.