If ever you wanted a sense of the Kafkaesque world that often characterizes California politics, imagine yourself in the shoes of Austin Beutner, Superintendent of the Los Angeles Unified School District (LAUSD).
Yesterday, you were the target of a march by the United Teachers of LA (UTLA) union demanding smaller class sizes and threatening to strike if its demand isn’t met. But guess what? UTLA has the power to deliver smaller class sizes. Here’s how it works:
LAUSD is California’s largest school district with 600,000 students. In its 2017–18 fiscal year it collected $7.2 billion in revenues, 24 percent more than four years earlier:
But spending on teacher salaries rose only 5 percent:
And the number of teachers declined 13 percent:
That’s largely because spending on retired employees — including retirement spending under UTLA’s control — surged. In LAUSD’s 2013–14 fiscal year, 9.9 percent of district operating expenses went to pensions and other retirement costs:
But just four years later, spending on retirement had grown 84 percent, 3.5x more than revenues and 17x more than spending on teaching. That surge boosted retirements’ share of operating expenses nearly 50 percent to an amount equal to nearly half the amount the district spends on teaching:
One-third of that retirement spending is for unnecessary, duplicative or excessive health insurance subsidies provided to retirees who are entitled to Medicare or ACA coverage. UTLA controls the Health Benefits Committee that authorizes those subsidies. Terminating those subsidies could provide more than $300 million to shrink class sizes or a $10,000 salary boost for each LAUSD teacher. Either way, UTLA holds the key.
LAUSD’s lagging spending on teachers took place despite fast growth in California school revenues:
And record spending per pupil:
But despite all that revenue growth, LAUSD barely received a positive financial certification from the California Department of Education and the LA County Office of Education says LAUSD’s fiscal situation is serious enough to potentially warrant the imposition of a fiscal advisor.
Absent reform to its retirement spending, LAUSD’s spending on teachers will lag even more when California schools experience a reduction in revenues as a result of a sell-off in stock and other investment markets.
Every other major union has reached agreement with LAUSD. UTLA is the hold out — and is demanding something already under its control. A strike isn’t necessary and would be devastating for employees and LAUSD’s 600,000 students and their families. Now is the time for UTLA to terminate unnecessary, duplicative or excessive retirement subsidies and help LAUSD to achieve the very objectives UTLA claims to seek.
