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*Updated Oct. 31

LA Unified moved close to agreeing to all its teachers union’s salary demands, but the union called the new offer “insulting” for not matching its plan to lower class sizes.

And the sweetened offer did not seem to put a damper on the union’s threats to strike. In a statement, its president called for members to “continue to organize and build strike readiness” and announced a Dec. 15 march in downtown LA.

The district sent its revised offer Tuesday to United Teachers Los Angeles, with a 3 percent retroactive raise for 2017-18 plus another 3 percent raise for 2018-19, no strings attached. UTLA is asking for 6.5 percent. Previous offers did not include the retroactive raise and were contingent on the district’s financial health, which is moving steadily toward a fiscal cliff and is being closely watched by county and state overseers.

Before LA Unified increased its salary offer, county officials already stated that they were concerned about the district’s ability to afford the raises. The district has said that 6 percent raises have been factored into the budget, and LA Unified has already negotiated similar raises for about two-thirds of its workforce.

The proposal also includes 12 hours per year of additional training for teachers in order to earn the raise. And to cap soaring healthcare costs, the district wants to increase by two years the length of service that new — not existing — union members would need before receiving the district’s generous healthcare plan for retirees, which covers the employee plus dependents for life with no premiums or co-payments. Other employee unions have already agreed to this so-called “Rule of 87” which refers to the age at retirement and number of years worked.

The teachers union reacted Wednesday by calling out the district’s new superintendent, Austin Beutner: “Beutner is trying to buy us off with a raise while simultaneously increasing class sizes, reducing retiree healthcare for new employees, and underfunding our schools. He also maintains his position that educators need to work more hours to earn a competitive salary, despite a national teacher shortage,” the union stated in a news release.

The district’s news release said LA Unified “remains committed to good-faith bargaining and providing hardworking teachers with better pay and more support,” including protecting “healthcare benefits for all current UTLA members” and “working to increase funding for public education.” It states that the new contract proposal will “set firm boundaries to safeguard against increasing class sizes across the school district.”

The district has already agreed to cap class sizes at 15 middle schools and 75 elementary schools in high-needs communities, but UTLA wants that extended to all schools. In the new offer, the district says it will form a working group that will hash out when class sizes can be raised. But until they do, the district would be able to raise class sizes if any of nine conditions exist — and several already do.

Those conditions include running a deficit of $100 million or more for the upcoming school year before any cuts the district might make to address that. But the district is already spending roughly $500 million more each year than it’s taking in. Another condition that would allow the district to increase class sizes would be if its enrollment declines by more than 1 percent. But this year LA Unified lost 14,500 students, and that was 2.9 percent below last year’s enrollment of 500,000. It has been averaging about a 15,000-student loss annually.

Another condition is if the district’s budget is not fully approved by the Los Angeles County Board of Education — and it currently is not. To prove it will be able to stay solvent, the district last month had to submit a revised budget to LACOE, which includes eliminating $43 million in administrative salaries by the end of this school year. The county has until Nov. 8 to decide whether to accept the revisions, and a county spokeswoman said Wednesday that LACOE has not yet determined if it will approve the budget. If it is not satisfied, that will put in motion a series of steps that could eventually lead to a fiscal takeover of the district.

LA Unified has been negotiating with UTLA for almost two years on a contract that would begin retroactively in June 2017 and last through June 2020. Contract talks stalled in July. In late August, 98 percent of UTLA members who voted authorized their leaders to call a strike at any time.

In September, UTLA filed an unfair labor practice charge with the Public Employment Relations Board against the district for “trying to silence educators and for interfering with our members’ rights.”

The parties entered mediation on Sept. 27. Those efforts ended Oct.12 after three sessions, with LA Unified filing an unfair labor practice charge against UTLA “for refusing to participate in good faith.”

The two sides are now in a process called fact-finding. The three-person fact-finding panel has 30 days to submit a non-binding report. The district will then be free to impose its last offer, and the union will be free to strike.

The district has said UTLA’s demands would bankrupt LA Unified “and lead to the unprecedented layoffs of about 12,000 employees, including teachers.”

UTLA President Alex Caputo-Pearl said in the press release that this week’s new offer, “As anemic as it is, is a result of our demonstrated power. Let’s continue to organize and build strike readiness. On December 15, we march in downtown LA for public education and show Beutner that we will not let him undermine our schools and our futures.”

Here is the district’s question-and-answer fact sheet about the contract negotiations and UTLA’s statement on this week’s offer.

Read more on the contract negotiations at LA School Report’s roundup of LAUSD labor talks.

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*This article has been updated with the district’s news release.