District, Teachers Announce Deadlock : Education: Talks break down as L.A. Unified rejects union demand for 10% pay restoration, and sticks to original 7% offer. Fact-finding will be next step in effort to avert a strike.

Labor tensions between the Los Angeles Unified School District and its teachers union intensified Friday when the district rejected a union counteroffer demanding a full 10% pay restoration and both sides announced a deadlock.

Supt. Sid Thompson said the Board of Education is sticking to its original offer of a 7% salary return because the cash-strapped school district “has thoroughly scoured every area of the budget” and cannot find more money for teachers’ pay.

The school board is not prepared to make high-risk decisions that could put the district’s financial stability at stake by agreeing to fully restore salaries, school board President Mark Slavkin said.

Teacher union President Helen Bernstein was blunt in her assessment of the day’s developments. “Print the picket signs,” she said.

With three weeks before the start of most schools Sept. 12, the nation’s second-largest school district finds itself mired in the uncertainty of whether there will be a chaotic teachers strike soon after 640,000 students return to class.

It is the second consecutive year that the union has leveled a strike threat because of a salary dispute. In the wake of severe budget reductions, the teachers have suffered a 10% cut for the last two years. In the midst of recession in 1993, teachers agreed to the cuts, hopeful that the school board would restore their pay this year.

On Wednesday, the district offered to give teachers back 7% of their salaries this year--of which 4% would be guaranteed in future contracts and 3% would be a one-time-only payment. In addition, the district points out that teachers will be receiving pay for five more days next year to make up for time lost after the January earthquake, making their checks 9.5% higher than last year.

Union leaders interpret the numbers differently.

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They call it a solid 2% restoration. They say that another 2% is contingent on reaching an agreement with other district unions to use $42 million in health benefits savings for salaries. And an additional 3% is one-time-only money that is not guaranteed in the future. Leaders said they are insulted that the district would try to entice teachers to consider earthquake makeup days as part of the offer.

Bernstein has vowed to put the district’s offer to a vote during the first week of school, and both sides have agreed to pressurized negotiations aimed at solving their differences before then.

The breakdown of talks Friday and the formal declaration of an impasse--a legal action that must be taken before a strike vote can be taken--clears the way for both sides to take the next step in the negotiations process, mediation and fact-finding.

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To save time, both sides agreed to skip mediation. But as of Friday, they had not reached agreement on a fact-finder, a person who makes non-binding recommendations to both sides about the offer in dispute. One candidate for the job is Thomas Roberts, a star in the labor dispute resolution business who has presided over high-profile major league baseball cases.

State Treasurer and gubernatorial candidate Kathleen Brown weighed into the dispute this week in a letter offering her assistance to both sides to help avert a strike. She said she had been briefed about the potential for a strike by teachers union officials.

Brown, a former Los Angeles school board member, told the district “it may be prudent” to further reduce its insurance liability and workers’ compensation funds to come up with $30 million to $40 million--a move that the union has been pushing.

In response, Slavkin has asked Brown to clarify her position on this issue. District auditors have said such an action, although not illegal, is a high-risk accounting move that could harm the district’s solid credit ratings.

“But if Kathleen Brown, as a constitutional officer of the state of California, says, ‘I can assure the board that this is a prudent thing to do and that it doesn’t assume undue risk,’ . . . that would be pretty strong footing for the board to make a decision,” Slavkin said.

He said he had not received a response from her Friday. Her office could not be reached for comment Friday night.