LAUSD's $400 million crisis

By George B. Sánchez | LA Daily News Staff Writer
Updated: 12/30/2008

Kindergarten classes could grow to nearly 40 children. Some 45 million meals for poor students might not be served. Art classes will likely be history. And hundreds of teachers could lose their jobs.

That's the bleak outlook for the Los Angeles Unified School District in 2009 as officials face $400 million in cuts next month and further reductions in state funding. The $400 million comes on top of a series of other cuts, taking the total to nearly $1 billion this school year.

While districts across the state have managed to avoid a large number of layoffs so far, LAUSD officials say job losses are almost inevitable because salaries and benefits account for more than 80 percent of the district's $12billion budget. And most educators expect bad news to continue coming from Sacramento well into the new year.

"We are looking at hundreds, possibly thousands, of job cuts next year," said Megan Reilly, the LAUSD's chief financial officer.

District officials have been tightening belts for months as the state - hammered by steep declines in tax revenue from the withering economy - increasingly cuts back funding to public agencies.

A.J. Duffy, head of United Teachers Los Angeles, said the district's proposed cuts might be exaggerated, but he worries that not enough teachers understand the extent of the local and state financial crisis.

Threats of teacher and other staff layoffs have been made in the past, but have rarely come to pass. In fact, the last round of mass layoffs was more than a decade ago, Duffy said.

"The writing is on the wall," Duffy said. "The fiscal crisis is going to last for a couple years."

Los Angeles charter schools face the same loss of funds as the result of the state's tough financial position and must also explore how to scale back costs.

"It's going to affect everyone," said Gary Larson, spokesman for the California Charter Schools Association.

"Do we anticipate schools closing? No, not really, because of the demand. As long as the state continues to fund based on enrollment, charters should be able to hang in there."

In the fall, LAUSD officials began to describe how Sacramento's budget crisis will impact the district. Initially cuts were planned for the district's bureaucracy, with no clear impact on classroom instruction.

But in the past two weeks, that has changed.

By one district estimate, the LAUSD is now deficit-spending at a rate of about $70,000 an hour. The $400 million in cuts proposed for next month is designed to get the district through the 2008-09 school year, which ends in June. But at least $200 million in cuts is expected for the 2009-10 school year.

Earlier this year, the district cut $472 million from its budget and eliminated 680 positions, many through attrition.

Incoming Superintendent Ramon Cortines, who will replace Superintendent David Brewer III on Jan. 1, oversaw many of the previous budget cuts. While working as senior deputy superintendent under Brewer, who was ousted by the board earlier this month after it agreed to buy out the remainder of his contract for $500,000, Cortines ran the LAUSD's day-to-day operations.

Since Brewer's contract buyout, Cortines has already presided over three budget-cutting meetings.

The school board will meet for the first time in the new year Jan. 13, when it's expected to take up the dire economic crisis facing the district.

In his first official report to the board as superintendent, Cortines will present a budget update.

In November, Cortines and Reilly announced 50 percent budget cuts for local districts and 30 percent cuts for departments at district headquarters.

Duffy said the recent promotion of Cortines will likely prompt midlevel managers and district headquarters bureaucrats to leave before layoff notices go out - and will hopefully spare severe teacher layoffs.

"We've got Cortines, who believes in decentralizing the district and returning money and accountability to the classroom," Duffy said.

Meanwhile, board members Tamar Galatzan, who represents part of the San Fernando Valley, and Yolie Flores Aguilar have proposed the Full Accountability to Taxpayers resolution, which calls for detailed information on the hiring of costly consultants.

Class sizes

The district is preparing for the possibility of no state funding past February 2009, which would force it to cancel its 20-student-per-classroom limit in kindergarten through third grade, Reilly said. The state pays for a majority of the program - $200 million - while the LAUSD covers an additional $80 million. To save money, the district is asking the state to allow class sizes to extend to 25 students.

While union officials doubt that state funds will entirely dry up in February, Reilly said raising the class-size limit would allow the district to cut 1,667 teaching positions.

If the district loses all its $280 million to pay for small class sizes, more than 5,500 teaching jobs could be cut and K-3 classes will likely jump to 37 students per teacher.

Meals

On Dec. 22, Cortines sent a letter to Gov. Arnold Schwarzenegger stating that the state's budget disaster means the district's free and reduced-price meal program will be cut nearly in half.

The state's subsidized meal funds could be slashed by $31.1 million; about one-third of that fund now goes to the LAUSD. The potential loss means eliminating breakfast, laying off cafeteria staffers and reducing healthy-food options. The annual number of meals served under the program would fall to 55 million from 100 million, according to Cortines.

Arts

Earlier this month, district officials issued a procurement freeze, meaning many contractors and vendors working with the district would no longer be paid. At the time, art programs taught by working artists and musicians who teach LAUSD classes through the Arts Community Partners Network were shut down until further notice.

Jobs

The district's biggest expense, Reilly said, is employees, who account for 83 percent of the budget. To avoid layoffs, district officials are also looking at making early retirement offers to some employees.

By law, layoff notices must go out by March 15 for certificated employees, while classified staffers must get a 45-day warning. Earlier this month, the UTLA organized protests that drew more than 12,000 teachers to demonstrate against the district's bureaucracy ranks, proposed cuts to health-care benefits and what they have called "upside-down priorities," including use of outside consultants.

"The deficit is not going away and it's getting bigger," Reilly said.