With bankruptcy looming in less than three weeks, Los Angeles Unified School District (LAUSD) might have to hand over control to the county, which could create even more challenges for families in the area.
The district, which is the second largest in the U.S., is grappling with a significant deficit stemming from unpaid labor contracts. It faces an August 7 deadline imposed by the county to propose a viable financial plan.
If LAUSD can’t revise its $20.6 billion budget, the Los Angeles County Department of Education has stated that the county will take over the troubled district, especially after the recent resignation of former Superintendent Alberto Carvalho, who stepped down following an FBI raid at his home.
School board member Tanya Ortiz Franklin expressed understanding of the county’s concerns.
“They’re justified in being worried,” Franklin told a local newspaper.
She acknowledged that the costly union agreements are a key factor in the district’s financial difficulties, despite the fact that all seven board members had approved the contracts earlier in the year.
To prevent a strike, LAUSD agreed to three separate contracts in April, costing nearly $1.2 billion every year.
The district is currently facing a budget deficit of $231 million through November, which is projected to escalate to a staggering $3.5 billion by June 2029.
LAUSD officials attribute this financial predicament to declining enrollment and the cessation of temporary pandemic relief funds.
However, the county’s education department was not satisfied with LAUSD’s explanations and ordered the school board to detail how they plan to implement cuts. If not, a county-appointed trustee may be assigned with veto power over spending decisions.
If the district goes bankrupt, the appointed administrator would remove all authority from Superintendent Andres E. Chait and the school board—a rare action for a large urban school district.
Potential school closures, program reductions, and thousands of layoffs are on the horizon, but the school board has delayed these decisions until July 1, 2027.
Parents and staff have expressed confusion and concern, while county officials remain mostly tight-lipped about the situation.
In a July 2 letter, County Superintendent Debra Duardo criticized the district’s budgeting approach and the “financial stability plan” the board approved just weeks prior.
Duardo remarked that the plan was insufficiently detailed and required more stringent financial oversight.
She accused the school board of mishandling negotiations with union groups and approving contracts that have led the district into a fiscal crisis, asserting that the promised budget cuts were not implemented.
Consequently, Duardo indicated that LAUSD is experiencing a serious funding shortfall.
“The district’s financial situation raises significant concerns about its ability to meet its financial commitments,” she noted.
In comments to the paper, LAUSD officials downplayed concerns about any immediate impacts for families if the county’s deadline is missed.
“We are in ongoing discussions with the county and value their guidance,” the officials stated.
