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.

But as the number of state charter schools has more than doubled — to 1,228 — over the past decade, grumbling has been building from traditional schools. This summer, that grumbling has translated into efforts to sharply increase regulation of charters.

Charter school advocates see this as a barely disguised effort to stop their movement in its tracks. The lack of strong regulations is behind the popularity of charters, they believe, allowing schools to focus on what works in classrooms as opposed to what the education establishment thinks is best.

Education establishment has long list of gripes

But defenders of traditional education say charters’ huge growth could never have occurred if there was an establishment conspiracy to subvert them. And they also cite several specific areas where they say their concerns about charters are specific and well-documented.

At a recent Senate Education Committee hearing, school officials — most notably Dina Wilson, director of the charter school office of the Los Angeles County Office of Education — offered a long list of complaints. The most prominent:

• Charter schools aren’t required to provide detailed financial information or to create comprehensive budget and facilities plans.
• Charter schools don’t have to follow laws requiring other schools to serve lunch, including subsidized meals for students from poor families.
• Charter schools have far more leeway in disciplining and expelling students, operating without the appeals process that regular schools must follow.
• Many charter schools don’t have high percentages of students from impoverished families who are often more costly to educate.

Charter advocates countered by saying the flexibility and freedom that they were criticized for having were not a problem with the hundreds of thousands of families eager to enroll their children. Advocates saw political motives — i.e., the animus of politically influential teachers unions — as being behind troubles some charters were having with authorities. 

The most specific accusation of charter mistreatment came from the CEO of Thrive Public Schools, a San Diego charter school organization. Nicole Assisi said despite having a track record of success and a strong planning document, first San Diego Unified and then the San Diego County Office of Education turned down Thrive’s request for a new charter. The reception was different from the State Board of Education, Assisi said. It unanimously approved the new charter, overruling the local decision-makers.

ACLU criticizes charters over admissions

But charter schools also face criticism from outside the education establishment. The ACLU Foundation of Southern California and the public interest law firm Public Advocates released a report on Aug. 1 that said about one-fifth of California charters were violating the law that they must be open to all students by having enrollment requirements — mostly involving academics — that public schools cannot impose.

The California Charter School Association responded by issuing a statement acknowledging problems that needed to be resolved. “We agree with the ACLU and Public Advocates that charter schools must be open to any student interested in attending, and no student or group of students should be excluded or discriminated against as a result of enrollment and admissions policies at any public school, including charter public schools,” wrote Jed Wallace, president and CEO of the charter association.

Wallace disagreed with the argument “that all essays, interviews and requests for student documentation for enrollment are per se discriminatory or exclusionary.” But he also wrote that all charter schools should review their policies to ensure “there is not even a perception of bias or discrimination in admissions and enrollment processes.”

Under the law, each school district was supposed to adopt a Local Control and Accountability Plan (LCAP) to ensure English-learners and foster children were getting the extra help that Brown and lawmakers promised. These plans outline district priorities and relate them to funding decisions.

Three years later, California education reform groups increasingly question how the LCFF is working out. They cite little evidence of more resources going to struggling students and many instances of extra dollars going into general school district budgets, with the blessing of Superintendent of Public Instruction Tom Torlakson.

This frustration led to the unusual decision last week of three reform groups — Public Advocates, Education Trust-West and Californians Together — to simultaneously issue studies that question how local LCAPs are being implemented.

Difficult to impossible to determine progress

EdSource has a roundup of their concerns:

Districts are not providing the level of transparency promised in exchange for increased spending flexibility,” wrote Public Advocates, a nonprofit law firm that has threatened to sue the West Contra Costa Unified School District for failing to disclose how it planned to spend millions of dollars on high-needs students. “Most districts are missing the opportunity to use the LCAP as a comprehensive planning tool for continuous improvement.”

“The usefulness of the LCAP as a means of accountability is compromised by the difficulty in gleaning a sense of coherence and what the plan actually entails,” Californians Together, a coalition of parent, professional and civil rights organizations focused on the needs of English language learners, wrote in a report, published this month, analyzing LCAP plans to improve services for English learners.

The reports, which follow similar analyses last year, studied several dozen LCAPs for the current school year from large and small, urban and rural districts. Public Advocates’ report, released Wednesday, can be found here. Education Trust-West’s report is here.

All three reports made the same overall criticisms: that it is often difficult, if not impossible, to find out how much some districts are spending on high-needs students; to track the expenditures over time; and to find a justification or rationale for districts’ spending decisions.

Brown won’t second-guess local funding decisions

Part of the reason for the frustration of reform groups isn’t related to problems implementing the Local Control Funding Formula at the district level. It’s with Gov. Brown, whose appointees on the State Board of Education sided with Torlakson on the question of whether the funds could be used for teacher raises and other broad district expenses.

At the 2013 signing ceremony for LCFF, Brown depicted the law as reflecting a historic new commitment to helping English-language learners. But of late, Brown administration officials have emphasized the “local control” aspect of the law — not the promises that more direct help would be given to the 1.4 million students who struggle with English in state public schools.

In a January 2015 telephone interview with editorial writers after unveiling his proposed 2015-16 budget. the governor said he would look into complaints that funds were going to teacher raises, not English-language learners.

But a year later, his aides took a sharply different position. In a January telephone interview with editorial writers after the governor unveiled his proposed 2016-17 budget, state Finance Director Michael Cohen said LCFF was meant to empower officials at local districts to make their own decisions. If they considered teacher raises a priority, the Brown administration had no issues with that, Cohen said.

The reform groups will present their critical findings about the law’s implementation to the State Board of Education at a meeting in May. The board is expected to try to fine-tune LCAP rules to make them easier to comply with and complete.

State Board of Education President Michael Kirst acknowledged local concerns about how unwieldy the process had become as a February state Senate hearing. But that hearing didn’t focus on the larger question of whether the LCFF’s initial goal of directly helping English-language learners and foster children was actually driving decisions at the district level.