L.A. Unified ‘Surplus’ Quickly Spent

For a big, urban school district with a budget larger than those of several state governments, $228 million in extra year-end funds doesn’t go as far as one might think.

Los Angeles Unified School District officials were startled to find last week that they had $578 million left over from the last fiscal year--far more than the $350 million they had expected.

But most of that money is already spoken for: $184 million is earmarked for violence-prevention programs, textbook expenditures and other programs; and $30.5 million will go toward this year’s budget shortfall.

And Supt. Roy Romer hopes to use $76 million for employee health benefits and workers’ compensation expenses. (Health benefits are still being negotiated, however, and union officials are balking at what they call one-time “stop-gap” funding.)

After all the committed funds are disbursed, district officials estimate they will have just $26.5 million left.

In fact, the district is worse off now fiscally than it was the year before.

“It’s not a surplus,” Joe Zeronian, the district’s chief financial officer, said of the newly discovered money.

“We started the [last fiscal] year with $604 million,” he said, “and now we will have an ending balance of $578 million.”

Nevertheless, school officials were relieved to have more money than they thought they would.

Board of Education President Caprice Young said that it was probably too late to replace $70 million in cuts officials made this spring that increased class sizes in fourth through 12th grades. Year-round schools have already opened.

However, Romer has recommended spending $16 million for computers and software, $25 million in bonuses for schools that increased their standardized test scores, and $2.9 million for a district reading program.

Zeronian said he doesn’t know why so much money is coming back this year from several hundred of the district’s 6,000 accounts.

In the coming days, his staff will review the formulas from March that led them to project the initial $350-million year-end balance.

Previously, Zeronian said, the district’s estimate has been within 1% of the total general fund budget. Last fiscal year’s unexpected balance is about 5%.

He surmised that furious midyear cost-cutting and constantly shifting budgets may have thrown off his staff’s calculations.

Romer said the discrepancy between the estimated balance and the actual was a byproduct of having such an extensive bureaucracy.

“This is a large, complex organization, and [we] don’t have week-by-week savings,” the superintendent said. “We have to add it up every three months.

“We’re saving money; that’s a good thing,” Romer said. “But we didn’t have an accurate estimate of how much money we were saving early enough.”