Blog: The Financial Mess At The Root Of The Los Angeles Teachers Strike – Forbes

On Monday, when Los Angeles teachers went on strike, it marked the first strike that the nation’s second largest school district has seen in 30 years. The United Teachers of Los Angeles (UTLA) has a set of demands that includes teacher raises, smaller class sizes, more counselors and librarians, and full-time nurse in every school. The district has offered a 6% raise and an increase of almost 1,000 educators to shrink class size. The UTLA has rejected the offer. That leaves 600,000 students across more than 1,000 schools in the care of substitutes.

Having once taught in California, where layoffs were solely based on seniority and high-gloss mailers telling members whom to vote for were the norm, I just don’t believe the UTLA is on the right side of students with its decision to disrupt the lives of families mandated by law to send their children to school and then told that teachers won’t be showing up for work. Approximately 360,000 students were absent from LAUSD schools on Monday, the first day of the strike. That number decreased to 345,000 absent students on day two.

It is hard for most people to fathom the crippling effect a strike in a city like Los Angeles will have on the region. There will be no winners. There can’t be because the financial problems plaguing the district for the last 40 years are too intractable and the impact on almost a half million families is too immense. The student population in the City of Angels is 90% minority, 82% living in poverty, 60% who are proficient in English. They will now rely on 400 newly hired substitutes in their schools that will continue operating on a normal schedule for regular classes and before- and after-school programs. Some learning will certainly take place, and the district deserves credit for working to keep schools open, but that is a band-aid. Learning time cannot be made up and with proficiency rates of 42% in reading and 32% in math, there really is no time to waste.

Most of the headlines have reported on huge classes, sex abuse settlements, and teachers forced to buy their own supplies. Charter schools have also taken much blame. But while it is true that the competition of charter schools does draw away students—and the dollars that attach to them—they only account for 50% of the drop in student enrollment. A 2015 report by The Independent Review Panel concluded that “over the past six years, LAUSD has lost almost 100,000 students and now serves about 550,000 students. About half of the loss of students is attributable to increased enrollments in charter schools, but about half of the students lost are no longer served by the District at all due to a decline in the birth rate as well as students dropping out of school or transferring to other school districts.” The same report projects that the district will continue to lose students at a rate of 2.8% each year.

And charter schools are public schools that are good for kids. Los Angeles parents and taxpayers have every right to choose the public schools that best serve their students. The inconvenient truth is that many Los Angeles charter schools are far outperforming their district counterparts. And the public money being spent on those public schools is an investment in kids, families, and the city.

From 2001 to 2016, according to the Census Bureau’s Public Education Finances report, overall spending in LAUSD has increased by 55%.Spending on salaries and wages has increased by 24%. Employee benefit spending has increased by 138%. If charter schools disappeared tomorrow and LA Unified Superintendent Austin Beutner decided to work for free, LAUSD’S financial problems would not go away.

One of the most serious financial problems at the root of the teachers’ strike has gotten little coverage. Many of the 30,000 active teachers currently on strike weren’t even born when the problem began and they own none of the blame for the current crisis. But in 1966, retiree health benefits for the district were established and in 1969, the district began paying the full health premiums—medical, dental, vision—for retirees and their dependents with zero required contribution. Fast forward almost 40 years, and the projected cost of retiree health benefits for 2019 alone is $314 million. According to Chad Aldeman from Bellwether Partners, “LAUSD has valued their retiree health promises at $15.2 billion, but [has] only saved $244 million.”

It is understandably confusing to parents and onlookers who see $1.8 billion in reserve yet see their children zoned to a school that doesn’t even have a nurse. But it all comes down to state law and the state Education Code that requires all districts to have a 1% minimum reserve at all times and to be able to show that they will maintain that 1% for the next three years. At present, the district is unable to demonstrate that it will have 1% in reserve during the 2020-2021 school year.  

UTLA doesn’t want to talk about any of that. Nor is it willing to admit the whole truth about declining student enrollment or even acknowledge the elephant in the room—unsustainable retiree costs. Until honesty and good faith become part of the conversation, students and families will continue to be harmed and the the district will be in a free fall toward bankruptcy.