The Teachers Union’s Demands Would Drive LAUSD to Bankruptcy

United Teachers Los Angeles, the city’s powerful teacher union, says its members have overwhelmingly authorized a strike “should one become necessary.” The union says 81 percent of its members voted, and 98 percent those teachers voted in favor of authorizing a strike — clearing the way for union leaders to call for a strike if negotiations with Los Angeles Unified School District remain deadlocked.

It’s been over a year of unproductive negotiations largely because the union’s salary and personnel demands would cost an additional $813 million annually and lead to immediate bankruptcy for the district.

A recent Reason Foundation policy study found that LAUSD is already in dire financial straits. Based on its current spending patterns, the district will run annual deficits of around $500 million in coming years. In fact, over 57 percent of LAUSD’s unrestricted general fund revenues will be diverted away from classrooms and toward employee pensions, special education programs, and health and welfare costs over the next four years. Barring state intervention or significant reforms, LAUSD is on a trajectory to be insolvent by 2022.

Nonetheless, the union claims the district can afford to make investments in across-the-board pay raises, lower its class sizes, and hire more counselors. But UTLA fails to acknowledge that the $1.2 billion LAUSD has in fiscal reserves will be fully depleted in three years or less — and that’s before factoring in the significant additional costs the changes the union is trying to negotiate.

UTLA also refuses to budge on demands for increased regulatory burdens on charter schools. The union’s calls for increased “charter accountability” should be seen as a plea for less competition. Even after controlling for demographics, LAUSD-authorized charter schools outperform the district’s public schools on a wide range of metrics. And parents are taking notice — more than 40,000 students are on Los Angeles’ charter school waitlists.

With California’s Local Control Funding Formula , state education dollars follow students who enter or leave a district. But UTLA grossly mischaracterizes these trends by blaming charter schools for LAUSD’s financial problems. The Reason Foundation study showed it was a dramatic overstatement when UTLA estimated the district lost nearly $600 million annually to charter schools. The district likely loses less than half that ($283 million a year) to well-performing charter schools that are winning over students and parents.

Moreover, since its implementation in 2013-2014, the LCFF has actually generated a net increase in LAUSD’s per-pupil spending. Thus, this should make funds diverted to students choosing charters irrelevant since the district is receiving more state support per student than it did before. Finally, blaming charters misses the point and is essentially blaming families for choosing what is best for their kids.

If LAUSD had responded to its fiscal problems by right-sizing the district, it would not be in the situation it finds itself in. Rather than scaling the district’s staff to track with declining enrollment, LAUSD currently employs more people than it did four years ago. The district has stayed afloat largely thanks to the extra revenue for high-need students it has received over the last four years. But with the LCFF now fully funded, the district can no longer simply rely on state funds continuing to rise.

LAUSD’s top labor negotiator, Najeeb Khoury, said in a letter that the union’s final offer to the district “would increase the deficit by $813 million, creating a $1.32 billion total annual deficit.” He went on to say: “L.A. Unified has $1.2 billion in reserves, simple math shows that those reserves would be exhausted by the end of the school year should L.A. Unified accept your ‘Final Offer.’  The District, in other words, would immediately become bankrupt.”

The district and union are scheduled for state mediation on Sept. 27 and union leaders have permission to call a strike if mediation doesn’t deliver a deal.  Whether there’s a strike or not both sides need to reckon with the bleak long-term fiscal future LAUSD faces.

This column originally ran in The Orange County Register.