LA WATCHDOG--Many knowledgeable people believe that the Los Angeles Unified School District (“LAUSD”) will declare bankruptcy within three years unless it takes drastic action to restructure its finances.
At the same time, LAUSD also needs to regain the trust and confidence of the 4.8 million people that it serves, beginning by providing a quality education to its more than 625,000 students, including the more 100,000 students who have elected to attend independently operated charter schools.
LAUSD has a poor reputation. The media is constantly telling us that a majority of its students fail to test at grade level and many students do not make it to graduation.
In many ways, LAUSD has been dealt a bad hand. Many qualified students have bailed, including those students whose families who have moved out of LAUSD territory or who have enrolled their children in private, parochial, or independently operated charter schools. As a result, LAUSD has been impacted by adverse selection as a disproportionate number of students come from homes where English is not the primary language and/or are eligible for the school lunch program.
The system has also been a political football where charter school proponents and other advocates of reform have battled the radicalized management of the local teachers union, United Teachers of Los Angeles, whose major goal is maintaining its dues revenue and achieving significant increases in wages and benefits. As a result of the recent election battle where a record of amount of money was spent, the Board now consists of a majority (4 to 3) of pro charter members.
All these issues are compounded by LAUSD’s upside down finances. The District’s Structural Deficit is projected to be in the range of $400 to $500 million in 2020 as enrollment is expected to continue its decline while LAUSD is not willing to right size its bloated bureaucracy.
There are also billions of deferred maintenance as LAUSD has neglected its infrastructure in order to pay for employee raises and increased benefits.
And then there is the $25 to $30 billion in long term debt and unfunded pension and other retirement liabilities that will continue to consume an increasing portion of the annual budget.
LAUSD is essentially a failed enterprise that will take five to ten years to effect a turnaround, and even then, the District will need to be very cautious in how it spends its money. This turnaround will require the building of a strong management team that has excellent management information systems and the ability to work with the teachers and their union. It will also involve working within the political system and convincing us, the public, that LAUSD deserves our trust, confidence, and vote when it asks the voters for more money.
This is not a job for a LAUSD insider who does not have the experience of working with City Hall, Sacramento, the public and the financial community. More than likely, an insider has existing allegiances, but there can be no sacred cows.
Austin Beutner (photo above) will be a superb Superintendent of Schools.
As a Deputy Mayor under Antonio Villaraigosa, he was an excellent interim General Manager of our Department of Water and Power. He worked well with the water and power systems, delegating authority to the experts. He right sized the capital expenditure budget to reasonable levels. But most importantly, he convinced Villaraigosa to hire an experienced utility executive and not a political hack.
Beutner was the co-chair of the LA 2020 Commission that made excellent recommendations that were not popular with the Mayor and the City Council, especially those that involved reforming the City’s budget and its underfunded pensions.
He has also developed a working knowledge of LAUSD as he has been a key member of a task force that made proposals involving student attendance, its real estate holdings, and oversight of the District’s operations.
Importantly, Beutner will be an excellent ambassador for LAUSD as he is respected by the political establishment, the media (including the Los Angeles Times), and the public, especially by many members of the Neighborhood Councils who appreciated his work at DWP and with the LA 2020 Commission.
My only reservation is whether Beutner has lost his marbles. Why would any sane person walk into this lions’ den?
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and is the Budget and DWP representative for the Greater Wilshire Neighborhood Council. He is a Neighborhood Council Budget Advocate. He can be reached at: firstname.lastname@example.org.)