An $18.8 billion budget that delays layoffs for a year but partially offsets increased spending by lowering planned payments to a trust fund for retiree health benefits was approved by the Los Angeles Board of Education on Tuesday.
Following extensive deliberation on Tuesday, the board adopted a revised budget that, among other potential uses, transferred $645 million over the next three years from contributions to retiree health benefits to an account that may be used to pay employee wage increases.
According to L.A. schools superintendent Alberto Carvalho, the move was generally the right one.
During Tuesday’s meeting, Carvalho stated, “I tried to strike a balance between being somewhat risk averse, but not so much that we don’t innovate and do right by our kids and our workforce.”
According to him, that balance includes taking into account the fact that our workforce must continue to exist and that we require stability in relation to our labor. Additionally, we must acknowledge the cost of living, the rate of inflation, and the housing expenditures in our town.
Currently, the roughly 400,000-student school system is negotiating employee contracts. To date, the district has given its largest union of non-teaching employees a 2% raise. An offer has not yet been made to the teachers union.
Over 2% is what employee groups are aiming for.
Following a furious letter to the Board of Education signed by the eight staff unions, money was transferred from future commitments to present requirements.
According to the union letter, the district’s ridiculous plan to raise trust contributions by around 1,000 percent resulted in a huge three-year deficit prediction. The purpose of this contrived crisis is to frighten our school communities and to confuse and divide individuals regarding our health benefits.
According to actuarial calculations, district officials maintain that the retiree benefits fund is underfunded by almost $8 billion. However, there are already $890 million in the fund as well.
We haven’t used the money yet. Rather, the district is using the general money to pay for these benefits, which will cost $315 million for the fiscal year ending June 30. According to Chief Financial Officer Chris D. Mount-Benites, the cost of these benefits was $150 million ten years ago, and it is anticipated that the amount will increase over the next years.
The updated budget has a more union-friendly stance. For instance, the trust fund will receive $142.6 million next year rather than $335.7 million.
Adriana Salazar, president of Teamsters Union Local 572, which represents lower-level managers in the school system, said the change was good but far from what the unions intended, which was to completely remove the payment for the time being. In addition, Salazar chairs the L.A. Unified Health Benefits Committee, which includes representatives from all employee unions.
California
California has been given sixty days by the Trump administration to exclude any mention of gender identity from a federally sponsored program that encourages abstinence and contraception.
The second most significant change reduced school staffing decreases that would have been implemented in a year. The aim was lowered from $60 million to $30 million as a result of these adjustments. Teacher assistants, supervision assistants, and library assistants are a few occupations that are at risk.
A structural deficit
Current estimates for revenue for the upcoming year are $15.9 billion, which is almost $3 billion less than what the district intends to spend. The district will keep depleting its ending balance, which was close to $7 billion last year and is currently about $4.8 billion.
Reserves from more than $5 billion in one-time pandemic-relief funds have allowed the country’s second-largest school system to continue deficit spending.
California
The state might face financial cuts, according to U.S. Education Secretary Linda McMahon, who did not specify when or what those cuts might be.
According to officials, the district will be in financial trouble by the end of 2027–2028 if no cuts are made.
State law mandated that the Board of Education implement a budgetary stability plan, which will be managed by the L.A. County Office of Education, given the negative spending projection. Last Monday, the idea was narrowly approved by the L.A. school board.
Senior officials stated that although some people are changing positions and earning less money, no full-time employees are losing their jobs or benefits, and no services to students are being eliminated for another year. The academic year 2026–2027 won’t be like this.
Closing up to ten schools or, at the absolute least, underutilized structures across many campuses is one impending cut that would save $30 million annually. Over a two-year period, it is anticipated that central and regional offices will be reduced by $325 million.
Meanwhile, union organizers and leaders demand more from a district reserve that still has several billions of dollars in it. They claim that this is proof that L.A. Unified can increase funding and pay higher salaries to improve programs for immigrants and Black pupils, which goes against President Trump’s efforts to cut off initiatives that support racial or cultural diversity.
Areas of investment
Carvalho stated last week that the Black Student Achievement Plan, or BSAP, will get an additional one-time augmentation of $50 million for the 2025–2026 academic year, increasing funding to $175 million. Among other improvements, BSAP offers additional academic counselors and mental social workers.
Campus greening already has a substantial budget, but Carvalho has committed to adding an extra $1 million year for the next three years.
California
The sale of up to $500 million in bonds to resolve decades-old sexual abuse complaints was approved by the L.A. school board.
It is anticipated that $5 million extra for student centers—up $1 million since last week—will aid immigrant families. Legal referrals and other family support are examples of services.
Karla Griego, a member of the school board, joined in a protest outside district headquarters where activists hailed these victories while simultaneously calling for more.
Griego stated during the board meeting, “It’s always challenging when we begin budget discussions with any future cuts to anything.” Therefore, I would like to take a moment to thank everyone who has been advocating for our most vulnerable communities over the past several weeks, or perhaps even months.
