Despite a structural deficit that threatens to bankrupt the district within three years, LAUSD pays its employees more in salary and benefits than workers at comparable school districts and gets less return on investment for what it spends. That was the conclusion of a new report titled “Hard Choices” from LAUSD’s Advisory Task Force, which was co-chaired until recently by LAUSD’s new superintendent, Austin Beutner.
LAUSD’s average teacher pay is 17 percent above the median for comparable districts when adjusted for cost of living. Nevertheless, LAUSD gets less for what it spends – in terms of teacher time and potentially in terms of student achievement – because LAUSD’s instructional days are shorter and because teacher pay increases are often tied to taking courses that may not benefit students, the report said.
“We are trying to be truth tellers in this report,” said Task Force Co-Chair Wendy Greuel, who presented the report to the Board Tuesday at the first meeting with Beutner attending as superintendent. “Hard choices can no longer be avoided. We have known this day would come for a long time…Bottom line is [LAUSD] needs to develop a long-term plan that outlines how fundamental investments in student learning and teaching, professional development and school leadership can be made to ultimately benefit the students and increase student achievement.”
The Task Force hired an outside nonprofit organization, Education Resource Strategies, to analyze how LAUSD allocates “people, time and money” compared to other school districts with similar student demographics, including rates of poverty, English Learners and special education. Oakland, Baltimore, Cleveland and Denver were among the comparison districts.
The report, which comes in the midst of contract talks with employee unions such as United Teachers Los Angeles, outlines some of LAUSD’s biggest financial challenges and poses a series of pointed questions about how to solve them, which stakeholders will be asked to consider. ERS also suggested specific potential solutions during its presentation to the Board.
Many of the problems – and their solutions – can only be achieved through negotiations with LAUSD’s employee unions, which have so far resisted such change. Employee unions have questioned whether the district’s financial position is truly as dire as the district claims. This report from an outside third party is an attempt to establish a clear set of facts, and it was unequivocal about the financial disaster that’s looming.
“The budget deficit is large and growing. Unless something does change, L.A. Unified will exhaust its savings, and students, employees and the community as a whole will be harmed,” Beutner said after the report was presented. “The debate should no longer be about whether these challenges exist, but how we can work together to solve them. While everyone is entitled to their own opinion on how best to solve these problems, we need all to start with the same set of facts.”
The report placed the largest share of the blame for LAUSD’s fiscal pickle on employee pension and healthcare benefits, which are far more generous than those at other districts. LAUSD’s teacher health benefit expenses were 44 percent higher than the median in comparable districts, costing an extra $170 million per year. LAUSD food service workers also receive an extra $19,000 a year in benefits compared to employees at peer districts, while LAUSD’s maintenance workers receive $12,000 per year more.
State-required contributions by districts to employee pension plans also are increasing dramatically, without any increases in funding to cover those costs. “In the next few years, the costs of those benefits will more than double for this school district, and Sacramento is not providing any more resources,” Beutner said. “The rate of increase in health care costs for L.A. Unified has exceeded the increase in revenue for almost 20 years. This is not new information.”
Retirement costs for employee pensions and healthcare take up an increasing share of LAUSD’s general fund budget every year and will reach 29 percent, or $2,766 per student, by 2020-2021. Without changes to these plans, students will be the ones to suffer, the report said.
“With an ongoing annual budget deficit scheduled to reach $400 million in 2020-21, protecting the classroom from future cuts will become impossible,” the report said. “The Task Force and the District recognize that the point has been reached where hard choices can no longer be avoided. Structural changes will need to be made to financially sustain L.A. Unified, and investments in student learning must be increased to begin to show progress for all students. L.A. Unified and all its stakeholders must act with both deliberate intent and a sense of urgency.”
Other school districts have been far swifter to take action to solve similar problems, but LAUSD has repeatedly stuck its head in the sand and failed to act, which has led to a ballooning healthcare liability that has reached more than $15 billion. Beutner signaled the days of denial are now over.
“L.A. Unified represents about eight percent of statewide K-12 enrollment yet represents more than 50 percent of the liability for these healthcare costs,” he said. “Other schools districts in California have taken steps to address this issue. L.A. Unified must as well.”
The $400 million estimated budget deficit in 2020-2021 is conservative and does not factor in raises that the district has already placed on the table in negotiations with UTLA. “Each 1 percent annual wage increase adds about $50 million of costs,” the report said, bringing the total projected deficit to $700 million if those raises go into effect.
The report also presented a surprising finding that LAUSD spends 14 percent above the median for comparable districts in per pupil funding. But it has greater variation in per pupil funding at its schools than peer districts, and the funding may not be leading to increased student achievement. The way LAUSD rewards teachers for taking extra courses early in their careers was singled out as one reason why.
“Are teachers getting compensated for outside instruction they are getting that may or may not be related specifically to what they’re teaching on their campuses?” Greuel asked. “Is that cost effective and really doing the best thing we can for our students? If you get an increase in your salary based on that class you have taken, that increase continues for the life of your time as a teacher. Again is that the best choice?”
The report also suggested that LAUSD is not investing enough in math and English instruction and needs to reallocate resources to align with those priorities. The current spending is about $2,600 per pupil or 18% of the total of $14,700 per pupil spending, the report said. “We think that that clearly is not enough to achieve the goals when we’re looking at student achievement,” Greuel said.
LAUSD also spends 40 percent more per pupil than comparable districts on administration but lacks continuity of leadership and does not use administrators as wisely as it could, the report said. Even though quality teachers and school leaders are essential to student success, principals in LAUSD move schools on average every 2-3 years.
Principals and assistant principals could benefit from more training, and teachers and students could benefit if administrators spent more time on instructional coaching for teachers. “Are we burdening principals with a whole bunch of things that really have nothing to do with the operation of their schools?” asked Joe McKown, partner in ERS.
McKown suggested that LAUSD could increase the length of the school day and set aside time for more professional development and teacher collaboration, which is considered a best practice at successful districts. The report also found that LAUSD spends far fewer resources on middle schools than on high schools and elementary schools – a fact that Board Member Ref Rodriguez (BD5) said he found “heartbreaking.”
Smaller schools also receive a disproportionate amount of funding per pupil. Greuel emphasized that the report was not intended to criticize priorities but to ask the district to consider whether it's intentional and whether certain services can be shared across smaller schools to save costs without hurting kids.
“Smaller schools, smaller classrooms may prove beneficial to student achievement,” Greuel said. “If you look strictly for budget, then you would say small schools don’t work. But we’re not looking through just budget. We’re looking through the lens of student achievement.”
Some of the options presented to the Board included:
1. Work with state to create alternative pension plan. ($600 million potential savings)
2. Revising health and welfare benefits packages for employees. ($415 million)
3. Addressing school administrative costs, sharing program coordinators across schools. ($150 million)
4. Revising staffing ratios in small schools. ($50 million)
5. Add teacher collaboration time: 90 minutes per week is considered standard.
6. Use tiered interventions early to keep kids with special needs in general education.
7. Determine the root cause of principal movement across schools. More principal training.
8. Look at schools that have multiple model designations such as magnet and affiliated charter, which make it hard to determine whether funding is being allocated equitably.
Board Vice President Nick Melvoin (BD4) and Member Richard Vladovic (BD7) both urged the superintendent to act on the report, unlike the many previous reports making similar warnings that have been issued over the last 15 years. “We’ve had a series of reports, and we’ve never really followed any of them,” Vladovic said.
“What are we going to do with this?” Melvoin asked Beutner directly. “This is all well and good but if this just sits on shelf or in an inbox, it’s not going to move the needle for kids. So what is our plan in the coming weeks and months, not years and decades, to act on the great stuff we're getting from the task force?”
Beutner responded that swift action is in order. “L.A. Unified is a top-down driven organization designed and structured to suit the needs of the community and students of a decade or two ago,” he said. “We need to immediately begin to develop a plan and design an organization which puts appropriate resources at the schools – sort of the upside down of what we have today.”
-- Jenny Hontz