Because voters approved Proposition 13 in 1978 — the ballot initiative that capped property tax hikes at 2 percent per year and required a two-thirds vote of the Legislature before taxes could be added or increased — California became known as the birthplace of the anti-tax movement that swept the nation. After President Ronald Reagan got a 25 percent income tax cut through Congress in 1981, antipathy toward taxes became a defining feature of modern conservatism.

The Howard Jarvis Taxpayers Association, business groups and Republican activists enjoyed decades of success in fighting off tax hikes in the Legislature and on the ballot. And in 2010 — long after California’s emergence as a progressive redoubt — this potent partnership won voter approval of Proposition 26, which targeted local and state efforts to get around laws like Proposition 13 by defining taxes as “fees” which only need majority approval by legislative bodies. It eliminated this loophole and applied the two-thirds approval threshold for tax hikes to local governments.

But less than a decade later, anti-tax groups have the right to feel besieged in California. In 2012, voters approved Proposition 30, which increased sales taxes for four years and income taxes for those who made $250,000 or more by seven years. In 2016, voters approved Proposition 55, which extended the higher income taxes on the wealthy until 2030.

Teacher unions push for Prop. 13 ‘split roll’

And in November 2020, it appears increasingly likely that voters will be asked to consider two separate ballot measures that would each raise state taxes by about $11 billion.

One measure — the California Schools and Local Communities Funding Act — has already made the ballot. Sponsored by the League of Women Voters and pushed by teachers unions, it would create a “split roll” exception for commercial property from Proposition 13, allowing the parcels to immediately have sharply higher assessments based on their current value and exposing many businesses to the possibility of large annual property tax hikes in an era in which property values are soaring. 

About $5.5 billion of the annual revenue would go to counties and cities for local services. Roughly the same amount would go to K-12 schools and community colleges.

But with school districts around California reeling from the phased-in 132 percent increase in payments to the California State Teachers’ Retirement System required as part of the CalSTRS bailout approved by the Legislature in 2014, that funding boost looks inadequate to the California School Boards Association. The group recently released a poll that showed public support for tax hikes on personal incomes of $1 million or more and on corporate income of $1 million or more, which it said would generate $11 billion in annual new revenue.

School boards seek relief from cost of pension bailout

EdSource reported that the CSBA was considering launching a “Full and Fair Funding” signature-gathering campaign to get such tax hikes before voters in November 2020. K-12 schools would get 89 percent of the new revenue and community colleges the remainder.

A May 26 analysis in the Los Angeles Times suggested that each tax hike measure might benefit from focusing on helping public schools.

But voters may question why two major tax hikes are needed less than two years after state leaders boasted about having a $20 billion-plus surplus. Democratic state lawmakers’ nervousness about the optics of adopting a first-ever tax on water when the state treasury was flush led to that proposal’s death even after months of lobbying by Gov. Gavin Newsom.

And the June 4 special election in the Los Angeles Unified School District raised questions about the value of linking tax hikes to school improvements. Measure EE would have imposed a parcel tax based on the square footage of commercial and residential property to generate $500 million a year for the state’s largest school district.

But even though advocates had a much better-funded campaign than opponents, Measure EE got only 46 percent of the vote — far less than the two-thirds necessary for approval. Analysts argued that many local voters simply didn’t trust L.A. Unified to spend the money in the ways that district leaders promised.

After a quarter-century of explosive increases in California, charter schools experienced all-time lows in growth the last two school years. And charters may also be facing an era of much harsher treatment from school boards allied with teachers unions who more than ever see charters as taking away resources that should go to conventional schools.

That was many education observers’ takeaway this week from the Los Angeles Unified School Board’s decision to approve a local moratorium on approvals of new charters until their impact on the state’s largest district is freshly assessed. District leaders had agreed to pass the resolution as part of their deal with United Teachers Los Angeles to end a strike that shut LAUSD schools for six days earlier last month.

Charters are privately operated public schools that hope to attract students from regular schools with their freedom to follow different teaching regimens. Some also offer specialized language or academic programs. Most are non-union.

From 1992 to 2016, charter schools went from zero students to more than 600,000 – about 10 percent of total K-12 students in California. The last two years, however, there was less than 2 percent growth in the number of total charters for the first time.

Charters initially faced brisk opposition from the California Teachers Association and the California Federation of Teachers, which had heavy influence in many districts thanks to the board members that union local chapters helped elect.

But in 2000, California voters approved Proposition 39 related to school financing. One provision requires that “school districts make available to all charter schools operating in their school district … facilities that will sufficiently accommodate all of the charter’s in-district students, and that facilities be ‘reasonably equivalent’ to other classrooms, buildings, or facilities in the district,” according to the state Department of Education page outlining how school districts should comply with the state law.

CalSTRS bailout spurs scrum for limited resources

Proposition 39 gave charters a potent tool to fight attempts to block them, leading to something of a cease-fire from unions. But the passage in 2014 of the California State Teachers’ Retirement System bailout not only isn’t having the effect of stabilizing school finances that some hoped, it’s created a more intense battle for district resources than ever.

Under the bailout, total contributions to CalSTRS will nearly double from 2013-14 to 2020-21 as hikes are phased in. But districts are required to contribute 70 percent of the new money – or close to $4 billion when the phase-in ends. Even with two more contribution hikes awaiting in 2019-20 and 2020-21, many districts across the state are already struggling to make their budgets balance.

That list starts with L.A. Unified, whose board was warned by the Los Angeles County Office of Education that the district couldn’t afford the two retroactive 3 percent raises it gave teachers to end the strike. The county office raised the possibility that the district’s finances could be so broken by 2020-21 that it could be subject to an outside takeover based on a state law requiring districts maintain minimum reserves.

L.A. Unified leaders hope to get the state Legislature to provide more funding for next school year. But the L.A. teachers union also wants the district to stop providing so much funding to the district’s 225 charters, which teach 112,000 of the district’s 486,000 students.

The wild card in a new cold war between teachers unions and charters is Gov. Gavin Newsom. While he has often praised charter schools as an important part of public education, he said while campaigning last year that he would sign legislation “requiring charter schools to be more transparent with their finances and operations and to adhere to stricter conflict of interest rules on their governing boards,” according to the EdSource website.

Charter school critics see this as an obvious response to the messy finances and scandals seen in some charters. Charter advocates see it as an ominous first step toward rolling back the charter movement. They backed former Los Angeles Mayor Antonio Villaraigosa in the 2018 governor’s race.

Leaders of the Los Angeles Unified School District, by far California’s largest school district, are struggling to head off a teachers’ strike that a state judge ruled Thursday can begin Monday. United Teachers Los Angeles (UTLA), which represents 35,000 teachers, wants an immediate 6.5 percent pay hike and a two-year contract. L.A. Unified has offered a phased-in two-year raise of 6 percent as part of a three-year contract.

But while much of the focus has been on the chaos that’s likely if the district’s 640,000 students have nowhere to go Monday morning, the crisis is also drawing attention to the gigantic financial headaches facing the second-largest U.S. school district. Even if L.A. Unified sees its contract offer accepted, it’s on track for perpetual budget problems for as far as the eye can see because of its massive liabilities for retirement pensions and retiree health care.

Austin Beutner, the former executive and Los Angeles Times publisher who is the district’s superintendent, says UTLA refuses to acknowledge that the district faces a $2 billion shortfall over the next three years even if the district’s cheaper contract offer is accepted. That would wipe out LAUSD’s $1.8 billion reserve.

But union leaders, with 98 percent support among teachers for a strike, depict the $1.8 billion as money that can be tapped both for a bigger raise and for hiring more teachers and support personnel.

Superintendent: Union hopes to create ‘state crisis’

Writing in the Times, Beutner sees the union’s refusal to ever make a counter-offer as a sign of a larger agenda. “UTLA leaders have said since early 2017 – before contract negotiations even began and more than a year before I became superintendent – that they wanted ‘a strike to create a state crisis,’” he asserted.

The hope is that such a crisis would lead the Legislature and Gov. Gavin Newsom to push for increased education funding. But it’s not clear if there’s much public appetite for paying higher taxes or using “rainy day” reserves for this purpose at a time when school funding has gone up more than 60 percent over the least eight years. School funding is $78.4 billion this fiscal year, an increase of more than $30 billion from 2010-11. On Thursday, Newsom proposed spending $80.7 billion for 2019-20.

Yet the tactic makes more sense as a reflection of union leaders’ drawing the same conclusion as Beutner about LAUSD’s grim fiscal path. The total cost of pensions and retiree health care for more than 36,000 former teachers is projected to double from 8 percent to 16 percent of the annual budget as mandatory payments to the California State Teachers’ Retirement system soar under the terms of the 2014 bailout approved by the Legislature. The bailout phases in a 132 percent increase in per-teacher contributions, with the final increase in 2020-21.

And UTLA also may have confidence it will be heeded in the Capitol, based on what happened in 2013 with the Local Control Funding Formula, which gives more per-pupil funding to districts with high numbers of English language learners, foster students and students from poor families. While the law was touted by Gov. Jerry Brown as a way to help close the achievement gap by directing additional resources to individually help students, state Superintendent of Public Instruction Tom Torlakson’s 2015 ruling that the additional funds could be used for teacher raises freed up school districts to ignore the original intent of the law.

L.A. Unified got huge boost from school funding change

About 510,000 of L.A. Unified’s students fit the criteria for additional state funding, vastly more than any other district in the state. But with few signs the extra money is reaching English language learners in LAUSD, one theory heard in education circles is that the Local Control Funding Formula was more about propping up the district’s shaky finances than a principled attempt to directly help struggling students. UTLA is by far the most active and powerful local teachers union in California.

L.A. Unified’s fiscal problems were laid out in 2015 by a panel of experts brought in to examine district finances. They concluded drastic steps needed to be taken to address the combined problems of declining enrollment and increasing pension and health care costs. But the district has not followed through with work force cuts or with attempts to collectively bargain for changes in employment contracts that give teachers lifetime health care benefits for themselves and their spouses – one of the most lucrative and costly benefits in California government. The panel said without huge changes, LAUSD was headed for bankruptcy.

The Los Angeles-based Parent Revolution group, which focuses on improving education and increasing educational opportunities for poor minority students, analyzed 44 LAUSD schools with weak test scores last school year. At these schools, only 20 percent of students met or did better than state math standards and only 28 percent in English.

Yet last school year, 68 percent of teachers in these schools were not subject to official evaluations – either through oversight or via exemptions ordered by their principals. Of teachers who were evaluated, 96 percent were found to meet or do better than district performance standards. Over the past three school years, the figure edged up to 97 percent getting positive evaluations – meaning only about one in every 30 evaluated teachers is found wanting.

“We do see this in other districts, where almost everyone has a satisfactory rating and it’s disconnected from student achievement,” Seth Litt, Parent Revolution’s executive director, told the Los Angeles Times. “It shouldn’t be disconnected.”

The findings parallel those that emerged from the landmark Vergara v. California lawsuit, in which nine students from state public schools represented by civil-rights attorneys hired by the Students Matter group alleged five state teacher job protection laws were so powerful that they had the unconstitutional effect of keeping incompetent teachers on the job and funneling them toward schools in poor communities.

Evidence presented by the plaintiffs in the case showed that only 2.2 teachers on average are fired each year for unsatisfactory performance in a state with 275,000 teachers at its public schools.

The case’s primary focus was on Los Angeles Unified. In a twist that few expected, some of the most powerful testimony against the teacher protection laws came from then-LAUSD Superintendent John Deasy. He testified in early 2014 that even if a teacher were “grossly ineffective,” it could cost the district millions in legal bills to fire the teacher.

Later that year, state Judge Rolf Treu agreed with the plaintiffs that the five teacher protection laws unconstitutionally deprived the students of their right to a good public education. Treu likened the laws’ effects to those of segregation before the U.S. Supreme Court’s 1954 ruling in Brown v. Board of Education. Treu’s decision was overturned on appeal on the grounds that the trial failed to clearly establish a factual nexus between student performance and the job protection laws.

3 state justices wanted to hear teacher tenure case

But education reformers were somewhat heartened by what happened next. Three members of the California Supreme Court wanted to hear an appeal of the appellate ruling, suggesting at the least some interest in Treu’s reasoning, which was mocked as novel and weak by attorneys for teacher unions. While they were voted down by the state high court’s other four justices, they could be a factor in future litigation.

As for Los Angeles Unified, litigation over school practices affecting minorities and high-needs students has been common for decades. In September 2017, for a recent example, the district reached a $151 million settlement in a lawsuit filed by the ACLU over the improper diversion of Local Control Funding Formula dollars that were supposed to be used to help struggling students in poor communities, especially English-language learners.

LAUSD was also the target in 2010 of what a federal government statement called “the first proactive civil rights enforcement action taken by the Department of Education under the Obama administration” – prompted by what then-Education Secretary Arne Duncan called the district’s failure to adequately educate many Latino and African-American students. The case was settled in 2011 after the district agreed to make several substantial changes meant to improve these students’ performance.

But evidence presented in the Vergara case showed no subsequent gains by these student groups.

Los Angeles Unified has 640,000 students, making it by far the largest school district in California. Only the New York City school system, which has about 1 million students, is larger in the U.S.

The board of the Los Angeles Unified School District passed a $7.5 billion 2017-18 budget this week on a 5-1 vote with Superintendent Michelle King

But despite the upbeat rhetoric, a crisis is looming in the nation’s second-largest school district as enrollment falls from a projected 514,000 in 2017 to 480,000 in 2020. Since the state’s main education funding formula is based on average daily attendance, this could force mass layoffs of teachers or even drastic measures like shortening the school year. A $422 million deficit is anticipated in 2019-20, with red ink after that for as far as the eye can see.

None of this comes as any surprise. A blue-ribbon commission’s report issued in November 2015 said L.A. Unified was facing fiscal disaster because of the enrollment declines, which are primarily due to falling birth rates, and because of the cost of pensions and retiree health care benefits. Employee retirement benefits will claim 8 percent of the school budget in 2017-18 and more than double that sum in coming years as the state’s 2014 bailout of the California State Teachers’ Retirement System ratchets up required payments from districts and as more of the district’s aging workforce retires.

These costs are the primary reason that while the 2017-18 LAUSD budget is nearly 7 percent larger than for the just-concluded school year, the plan still only penciled out after 121 layoffs or “separations,” mostly for holders of clerical positions. About 180 employees will be reassigned, many to part-time duties.

Blue-ribbon panel warned of disaster in 2015

Since the grim 2015 report was issued, three developments have cast L.A. Unified’s finances in an even harsher light.

The most significant is charter school advocates backed by billionaire philanthropist Eli Broad and other wealthy reformers taking over the LAUSD school board in a May election, defeating teachers union-backed candidates who have generally controlled the board in recent times. Broad wants half or more of Los Angeles students in charters, double the current amount. While reformers have a case that this would be better for students, it would sharply reduce state funding under control of district officials and thus make it harder to forge any comprehensive response to the coming budget crisis.

The second development is a legal challenge mounted by civil rights groups that alleges the district has misspent vast amounts of state funds that were supposed to go specifically to help English-language learners, impoverished students and students in foster homes.

Filed in July 2015, the claim initially seemed unlikely to succeed. The previous month, state Superintendent of Public Instruction Tom Torlakson had overruled a subordinate and held that Local Control Funding Formula dollars could be used for teacher raises – suggesting the restrictions on how the funds could be spent weren’t as strong as reformers believed.

But in May 2016, the Department of Education that Torlakson oversees held that L.A. Unified had improperly diverted $450 million in Local Control dollars.

The third development is the election of Donald Trump as president. Under Education Secretary Betsy DeVos, federal funding for education programs in all 50 states seems likely to significantly decrease. Federal dollars covered 9 percent of California’s education spending in 2016-17.

Last week, a three-judge panel of the fourth state appellate court district unanimously rejected a 2015 PERB ruling that if upheld would have invalidated a successful 2012 San Diego ballot measure that gave newly hired city employees – except for police officers – 401(k)-style retirement benefits instead of defined-benefit pensions. The measure was meant to dig California’s second-biggest city out of a hole created by two City Council decisions to intentionally underfund the San Diego pension system, leading to a city fiscal crisis so severe that San Diego was dubbed “Enron-by-the-Sea” in 2004 by the New York Times.

PERB’s ruling was based on the view that any pension ballot measure that was promoted by elected city officials – in San Diego’s case, by then-Mayor Jerry Sanders and several City Council members – ran afoul of state requirements that local governments had to negotiate in the standard collective bargaining “meet and confer” process before they could change terms of employment.

This legal argument was tough to square with California’s history. Elected officials frequently have taken the lead in employing direct democracy to adopt new laws or modify existing ones – including those that affect terms of employment for public employees. In 2005, for example, Gov. Arnold Schwarzenegger sought to change teacher tenure rules in a special election. Schwarzenegger couldn’t sell the change to voters, but his attempt to do so was not seen as unlawful or unusual.

The appellate panel agreed with the city of San Diego’s argument that while elected officials helped lobby for the 2012 pension reform measure, it was crafted and placed on the ballot in keeping with standard practices for citizens’ initiatives, with petition committees, signature-gathering campaigns and other normal trappings of direct democracy. The ruling also noted that PERB had tried to use its official powers to block the ballot measure in early 2012 even before it reached the ballot, with the hint that appellate judges saw this decision as a sign of PERB abusing its authority.

PERB wanted collective bargaining to apply retroactively to older laws

PERB’s previous setback in asserting the sweeping powers of collective bargaining laws came in its response to a lawsuit filed in 2011. Parent activists sued the Los Angeles Unified School District for not considering student performance when formally evaluating teachers, as is required by the Stull Act, a far-reaching state education blueprint enacted in 1971.

PERB contended that before teachers were subject to such evaluations, the matter should be collectively bargained – even though the primary law establishing collective bargaining for teachers was approved in 1975, four years after the Stull Act took effect. The agency also held that it should have initial jurisdiction over the case – not state courts.

But Los Angeles Superior Court Judge James C. Chalfant’s 2012 decision categorically rejected PERB’s arguments, saying that LAUSD could not ignore the Stull Act’s requirements, that collective bargaining did not apply retroactively to older state laws and that parent activists were free to use the courts to challenge whether public schools were complying with state laws.

The Stull Act remains an area of contention for California public schools despite Chalfant’s ruling. In September, Contra County Superior Court Judge Barry P. Good rejected a lawsuit that said 13 Northern California school districts were breaking state law by refusing to consider student performance in evaluating teachers.

Good’s 40-page ruling held that the Stull Act’s requirements were not as “clear and unambiguous” as those who filed the lawsuit contended.

Children entering charter schools in Los Angeles already outperform peers who attend traditional public schools, then pull ahead even a bit more, especially those attending charter middle schools … .

 

Pupils who enter charter elementary or high schools displayed significantly higher test scores, relative to counterparts entering traditional public schools at the same grade levels, the report said. Elementary students in charter schools benefit from slightly steeper learning curves, relative to peers remaining in conventional schools, researchers said. Charter high schools were no more or less effective than traditional schools in boosting student performance.

 

Charter schools, while publicly funded, operate independently of many state requirements and the administration of the Los Angeles Unified School District. Some 274 charter schools operate in L.A. Unified this fall, more than any school district nationwide.

 

The four-year study of 66,000 students at charter schools in Los Angeles Unified — one of the largest research projects yet on charters — offers generally positive news about their quality of education.

The $490 million ‘Great Public Schools Now Initiative’

The study is sure to be invoked by Broad and others unhappy with the quality of education in the nation’s second-largest district. In September, the Los Angeles Times obtained a copy of a 44-page report prepared for Broad called “The Great Public Schools Now Initiative” that corroborated earlier stories that Broad hoped to increase from 16 percent to 50 percent the number of L.A. Unified students in charters, which would require the creation of an estimated 260 new schools. A key passage in the executive summary:

The opportunity is ripe for a significant expansion of high-quality charter schools in Los Angeles. Thanks to the strength of its charter leaders and teachers, as well as its widespread civic and philanthropic support, Los Angeles is uniquely positioned to create the largest, highest-performing charter sector in the nation. Such an exemplar would serve as a model for all large cities to follow.

According to the Times account, the report cited …

… numerous foundations and individuals who could be tapped to raise money, including the Bill and Melinda Gates, Bloomberg, Annenberg and Hewlett organizations. Among the individuals cited as potential targets for fundraising were Eli Broad, Irvine Co. head Donald Bren, former entertainment mogul David Geffen and Tesla’s Elon Musk.

 

It also suggested a strategy of grassroots organizing and civic engagement designed to generate more interest among parents in charter schools.

UTLA, CTA gear up for public-relations war

The California Teachers Association and its largest chapter, United Teachers Los Angeles, are ramping up for the challenge. The UTLA has already launched a picketing campaign against the plan. At a November rally, CTA President Eric Heins said, “We are here to say to Eli Broad and to Walmart that our schools are not for sale. … The 325,000 members of the California Teachers Association stand arm in arm with UTLA and with CFT to say no to Eli Broad, to say no to Walmart, and to help build the schools that all L.A. students deserve.”

The CTA has won support from Diana Ravitch, a high-profile education reformer and author who’s made an odyssey from harsh union critic to someone who agrees with the union claim that there is something unsavory, corporate and ominous about a school reform movement organized by billionaires. That’s how she characterized Broad’s effort on her website.

“Will the [LAUSD] board go along with Eli’s silent coup or will they choose someone to represent the public interest?” Ravitch wrote.

Broad’s defenders describe his school reform ideas as very comparable to President Obama and his push for school and teacher accountability. But the nation’s two largest teachers unions, the National Education Association (which counts the CTA as its biggest affiliate) and the American Federation of Teachers (the California Federation of Teachers is its biggest affiliate), reject that comparison.

Obama’s recent decision to sign the Every Student Succeeds Act, a national education framework replacing 2002’s No Child Left Behind law, would appear to back up the NEA’s and AFT’s view. It pulls back sharply from federal accountability requirements imposed on states and individual school districts.

The new law swept to bipartisan passage because of an unusual coalition of Democrats who joined teacher unions in saying too much class time was being spent on testing and Republicans who said Congress should not be a “national school board,” in the phrase of Tennessee Sen. Lamar Alexander, a former secretary of education.

Mayor Ed Lee and the San Francisco Unified School District announced Wednesday they plan to build a 100-unit housing complex solely for public school teachers and paraprofessionals, and invest up to $44 million over the next five years to help them purchase homes.

 

The proposals seek to help the many teachers and teaching assistants in San Francisco who say untenable housing prices have made it impossible for them to live in the city.

 

“Providing this housing opportunity for our teachers is one of the most important things we can do as a city,” Board of Supervisors President London Breed said in the mayor’s office Wednesday. She added that she was “really a bad kid in school” and the teachers who helped children like her “deserve an opportunity to live in this great city.”

 

The plan for a teachers-only housing complex is in its nascent stages. City and school officials said it will be constructed on property already owned by the school district, although they wouldn’t identify what sites are under consideration. They also haven’t determined who would qualify for the housing.

In May, Los Angeles Unified announced similar plans. This is from the LA Weekly:

The Los Angeles Unified School District [has a] 66-unit, four-story Selma Community Workforce Housing Project under construction at North Cherokee and Selma avenues in Hollywood and is scheduled to open in fall of 2016, the district says. It’s “intended for L.A. Unified employees who fall into a designated economic category. The complex is part of the District’s ambitious effort to attract and retain staff who want to live near work but can’t afford to pay for housing costs.”

Gov. Davis won tax break for teachers

This isn’t the first time that teachers in California have been singled out for special treatment. In 200o, Gov. Gray Davis sought to exempt teachers from the state income tax, a proposal that quickly faced strong opposition. He ended up signing a far more modest measure that gave teachers a tax credit of up to $1,500 for out-of-pocket classroom expenses.

Given that the average teacher pay in California is nearly $70,000, it seems possible that opposition could build to singling out a group with middle-class pay for special treatment in a state in which 23 percent of residents are in poverty. But San Francisco officials sought to blunt such concerns by framing the policy as being crucial to attract and retain teachers.

But in January, the Legislative Analyst’s Office warned that none of the 50 state school districts it surveyed — including California’s 11 largest districts — had adequate safeguards in place to deal with the influx of new funds. Now the first of what could be many lawsuits has been filed alleging LCFF dollars are being taken for uses not permitted by the 2013 law. The L.A. School Report website has details:

The lawsuit, filed by ACLU SoCal, Public Advocates, and Covington & Burling LLP on behalf of Community Coalition South Los Angeles and L.A. Unified parent Reyna Frias, says the district … has already misdirected $400 million in 2014-15 and 2015-16 combined, and if not corrected, will amount to $2 billion in funds misdirected away from high needs students over the next 10 years. …

 

At issue is the district’s accounting practices regarding its LCFF dollars. The lawsuit alleges that by counting prior spending for “special education” as spending on services for low-income students, English language learners and foster youth, it deprives many students of the funds because not every special education students falls into those categories.

 

“LAUSD’s inclusion of special education funding is improper under the LCFF statute and regulations, and therefore violated mandatory duties created by the statute and regulations,” the lawsuit states.

ACLU has history of successfully suing LAUSD

The ACLU’s involvement is notable because of the group’s long record of successfully challenging L.A. Unified’s actions in court. The cases include suing over extreme teacher turnover at heavily minority schools; “last-hired, first-fired” teacher retention policies; and the treatment of gay students by teachers and staff at one school.

The ACLU has a pending lawsuit against LAUSD and the state over disparities in teaching time between affluent schools and those in poorer communities.

Its latest lawsuit was foreshadowed by the release last month of a UC Berkeley study showing L.A. Unified was commingling LCFF funds with its operating budget and prioritizing new hiring instead of programs to specifically help English-language learners and foster children.

Among the findings:

Despite pro-equity goals, we found that the bulk of LCFF investment dollars (the $145 million) was not distributed according to any transparent needs index. Furthermore, fiscal priority was placed on restoring adult staff positions often not directly tied to instruction, especially the dollars allocated to elementary schools. …

 

The District largely ignored their equity formula in distributing investment dollars to elementary schools. A policy decision was made internally to allocate a librarian position, instructional specialists, and assistant principals to most elementary schools, regardless of the TSP count. … This appears to reflect the District’s priority placed on re-staffing adult positions, rather than stemming from any distinct strategy for narrowing achievement gaps. …

 

[The] bulk of LCFF dollars has seeped into the district’s base budget with … little apparent regard to the students who generate the new dollars.

Black lawmakers already had warned about diversion

As CalWatchdog reported in March, the possibility of LCFF funds being diverted is a major issue for the California Legislative Black Caucus. In January, speaking on behalf of the caucus, Assemblywoman Shirley Weber, D-San Diego, testified at a state Board of Education meeting that “any authority for the use of supplemental or concentration grants to schoolwide and districtwide expenditures must clearly link the services to demonstrated effectiveness in increasing student achievement and closing achievement gaps, and demonstrate that the expenditures are proven effective for ‘concentrations’ of unduplicated children in schools in the district where concentrations exist.”

According to the UC Berkeley study and the allegations in the ACLU lawsuit, that’s not what is happening in California’s largest school district.

Previous bond oversight language was far stricter. It only allowed the use of long-term borrowing to pay for school buses if there were a reasonable expectation that they would last at least 20 years. But in Proposition 39’s wake — especially when operating funds were squeezed because of the state revenue plunge from 2008-2012 — bonds have been used for everything from graffiti cleanup, minor repairs and painting to purchases of short-lived laptops, iPads and other tablet computers.

SEC wades into LAUSD mess

But now regulators with the federal Securities & Exchange Commission are questioning the propriety of what California school bonds have been used to buy. Their angle isn’t the legality of these uses under state law. It’s whether these uses conform with what bond buyers were told — specifically when it comes to L.A. Unified’s troubled iPads-for-all program:

The federal agency is charged with protecting investors and maintaining fair, orderly and efficient markets. Its enforcement division frequently looks into “misrepresentation or omission of important information about securities,” according to the commission.

With the help of an outside law firm, L.A. Unified prepared a presentation, dated March 31, that outlined measures it took to inform the public and potential investors about how the taxpayer-approved bond funds would be spent. …

California law allows school construction bonds to be spent on technology; districts also list the intended uses of bond funds in ballot materials available to voters.

L.A. Unified clearly designated funds for technology, but did not mention tablets. At the time of the district’s most recent bond issue, in November 2008, iPads were still two years away from entering the marketplace.

But officials have maintained that tablets are a modern equivalent of the traditional computer lab and therefore a legal and appropriate use of bond funds.

That’s from the L.A. Times.

Boilerplate bond language used across state

Though the SEC probe is informal for now, it could have alarming implications for school districts throughout California that have used 30-year borrowing on short-lived electronics. That’s because the bond descriptions that LAUSD provided to potential buyers were boilerplate of the sort routinely used by all districts.

If the SEC decides the language is so vague as to be illegally deceptive, that would be a problem for dozens of school districts, only starting with LAUSD and the state’s second-largest district, San Diego Unified.