LAUSD is at ‘high risk’ for insolvency, state fiscal group warns – Los Angeles Times
Pressure has intensified on Los Angeles Unified to follow through with emergency budget cuts after a California fiscal crisis oversight team concluded that the school district is at “high risk” for insolvency — and must move quickly to avoid losing control over budget decisions.
The state’s school Fiscal Crisis and Management Assistance Team has concluded that the poor financial outlook has been brought on by increased hiring as enrollment declined, employee raises that exceeded the rate of increased state funding, sharply higher costs for educating students with disabilities, and maintaining classroom space for twice as many students as needed.
“The district has not fully addressed deficiencies” identified by the Los Angeles County Office of Education in its fiscal oversight letters, the team stated in a reportpresented to the school board Tuesday. “The district has not sufficiently adjusted staffing and facilities use in response to declining enrollment.”
The financial troubles are especially concerning because the Los Angeles Unified School District has failed to meet past budget reduction targets, the report concluded, and the stakes have become higher, with solutions more painful to carry out. The projected cutbacks over the next three years include more than 6,000 jobs in a school system that has been adding employees. The current workforce is about 80,000 full- and part-time employees.
District officials are not challenging the data.
“Los Angeles Unified has been transparent about significant financial challenges,” a district statement said. “The Board has already adopted a fiscal stabilization plan to address these challenges, including making difficult decisions to maintain the District’s financial health.”
After the presentation, Supt. Andrés E. Chait spoke of the importance of “fidelity” to the district’s “fiscal stabilization plan” and “certainly being nimble as conditions change, but for the most part adhering to what was put forth back in June.”
