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 \u201chigh risk\u201d for insolvency \u2014 and must move quickly to avoid losing control over budget decisions. <\/p>\n
The state\u2019s school Fiscal Crisis and Management Assistance Team has concluded<\/a> 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.<\/p>\n \u201cThe district has not fully addressed deficiencies\u201d identified by the the Los Angeles County Office of Education in its fiscal oversight letters, the team stated in a report<\/a> to be presented to the school board Tuesday. \u201cThe district has not sufficiently adjusted staffing and facilities use in response to declining enrollment.\u201d <\/p>\n 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.<\/p>\n District officials are not challenging the data. <\/p>\n \u201cLos Angeles Unified has been transparent about significant financial challenges,\u201d a district statement said. \u201cThe Board has already adopted a fiscal stabilization plan to address these challenges, including making difficult decisions to maintain the District\u2019s financial health.\u201d<\/p>\n The teachers union, in a memo to school board members, presented a counterargument and said the state team exaggerated the crisis.<\/p>\n The team\u2019s role is to help California education agencies prevent and resolve serious financial and operating challenges.<\/p>\n A separate presentation<\/a> to the board will note that the county education office has \u201cconditionally\u201d approved the L.A. Unified spending plan for 2026-27 of $20.6 billion. Conditional approval is better than a rejection, but the message from the state and the county is fairly consistent: Making the necessary cuts will be hard and detrimental; not making them would be disastrous.<\/p>\n The union\u2019s counter-case<\/p>\n The union noted that the state agency\u2019s process includes leaving out the prospect that additional state revenue will come through, which has historically been the case in most recent years. <\/p>\n That is why the union supports the school board\u2019s decision to postpone cuts as long as possible to the back end of a three-year planning window \u2014 on the premise that many cuts could be avoided.<\/p>\n However, if the cuts must be made ultimately at the original targeted levels, they will be deeper because of the delays.<\/p>\n The union does not accept the necessity of unpaid furlough days or increased healthcare costs for employees \u2014 at least not at this time. Such cuts must be negotiated with unions. If that doesn\u2019t happen, the district will have to substitute equivalent cuts elsewhere.<\/p>\n In its memo to the school board<\/a>, the union said the state\u2019s own data analysis had placed the district at \u201cmoderate risk\u201d rather than high risk. But the risk designation automatically changed to \u201chigh\u201d<\/a> when county officials made what the union characterizes as subjective conclusions about the extent of the crisis.<\/p>\n But whether the risk is high or moderate, it will be nearly impossible to avoid significant cuts, most parties agree.<\/p>\n Data show roots of crisis<\/p>\n The state report lays out data in detail. <\/p>\n The state agency calculated that the district has classroom capacity for about 718,475 students, compared with a 2025-26 enrollment of 353,065, \u201crepresenting an overall utilization rate of approximately 49.1%.\u201d Of the district\u2019s 738 campuses, 481 operate at or below 60% capacity. <\/p>\n \u201cFacilities with substantial unused capacity continue to generate operating and maintenance costs,\u201d the report states.<\/p>\n