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LAUSD deal with teachers means fingers crossed for more state money

Vanessa Romo | April 22, 2015

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Alex Caputo-Pearl teachers

UTLA President Alex Caputo-Pearl at a press conference yesterday

LA Unified’s ability to pay for a new teacher contract that gives the union’s 35,000 members a 10.4 percent raise — their first in eight years — relies on two factors: One, a stronger than expected boost in tax revenues from the state. And two, a solution to the systemic problem of declining enrollment.

That, or the district faces program cuts and budget deficits.

If approved, the new deal will cost a total of $633 million over three years, plus an additional $31.6 million for three labor groups with “me too” clauses, also over three years, according to LA Unified officials.

The district had initially allocated $353 million for UTLA, which means the additional money from the state and from enrollment increases could be crucial to forestalling deficits in the years to come. Superintendent Ramon Cortines told board members that the district faces potential deficits as much as $559 million over two years through 2016-2017 if the additional state money is only a one-time occurrence.

The district has been crying poverty for months, but board members yesterday attempted to assuage concerns that implementation of the agreement would bring LA Unified to its financial knees by expressing their faith in the continued growth of the state economy.

The California Legislative Analyst’s Office announced in November that barring an unforeseen economic disaster, it anticipates a revenue gain of $1 billion to $2 billion, if not more, for the current fiscal year. That’s on top of the record $113 billion state spending plan. And, “Additional revenues in 2014-15 will go largely or entirely to schools and community colleges and could result in a few billion dollars of higher ongoing state payments to schools,” according to the report.

Board President Richard Vladovic told reporters yesterday that LA Unified’s cut of the extra cash flow would be 11 percent of whatever extra money the state sends to school districts. In the best case scenario — a $2 billion infusion — the district’s cut would be somewhere in the neighborhood of $220 million. In the worst case, it means only another $110 million.

While the difference between the two figures is an entire billion dollars, Robert Oakes, legislative director for state Senator Carol Liu, Chair of the Education Committee, says the windfall is likely to be on the higher end.

“From what I’m hearing it’s going to be closer to $2 billion, and under Proposition 98 schools get the bulk of that,” Oakes said. “It follows that as LAUSD is the biggest district in the state, it’ll get the biggest chunk of that.”

That is a point board member Steve Zimmer emphatically repeated.

“We will absolutely be able to pay for this,” he told LA School Report. “Absolutely, without question.”

Zimmer concedes there is no crystal ball to forecast the nation’s financial future, but he says, “even if we imagine another financial meltdown in the year 2016-17, we are not committing anything for that year.”

The tentative agreement with UTLA, reached last Friday night, explicitly outlines the 10.4 percent salary payout over two years, and requires a re-opener discussion at the end of that timeline.

“Most people assume that the re-opener is a way for the union trying to come back to the table to get more money, but it’s also there for the district,” Zimmer said. “The district has the option to bring UTLA back to the table and say we’re dealing with this new fiscal reality and we need to sit back down to negotiate the terms.”

Board member Mónica Ratliff expressed reservations about the feasibility of the agreement despite joining in the unanimous vote to push the contract forward for ratification by the teachers union.

“The District’s financial viability is critical to meet the needs of our students, communities, and for the long-term availability of jobs and benefits for our labor partners,” Ratliff wrote in a statement. “Before the district can enter into any agreement with an exclusive representative such as this one, the district is legally compelled to consider the financial impact of the agreement – including obtaining a certification signed by the Superintendent and chief business official confirming that the District has the financial capacity to meet its obligations under the agreement.”

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