LOS ANGELES — The fight between the Los Angeles Unified School District and its teachers' union has turned into a war of words about the district's financial documents.
“LAUSD has supposedly offered to let United Teachers-Los Angeles audit its books, an offer that UTLA has accepted,” according to the union’s statement Tuesday. “However, the district continues to refuse to provide key financial information, including withholding information on donations and consultants.”
The union says that LAUSD has $1.86 billion in reserves. The school district says it began the 2018-19 school year with $1.2 billion in savings, not the amount claimed by the union.
“Starting next school year, 2019-20, savings will decline to only $700 million,” according to a district statement. “L.A. Unified has offered to allow UTLA to audit the District financials to find the mysterious $1.7 billion UTLA claims to exist.”
The union and school district have been swapping verbal blows since mid-August, and the union membership voted to strike Aug. 31.
"In the wake of UTLA’s 98% strike authorization vote—an overwhelming show of solidarity in support of our bargaining demands—we demand that Superintendent (Austin) Beutner stop acting in bad faith, respect the legal process for bargaining, and get directly to mediation," union officials said. "Setting a date 56 days from impasse is an insult not just to the legal process established around collective bargaining, but to LAUSD educators, who are fighting on behalf of our students and communities."
The Public Employment Relations Board has set a Sept. 27 mediation date, “as prescribed by California law, and we are looking forward to reaching an agreement. L.A. Unified accepted and PERB has confirmed,” LAUSD said in a statement.
The District has 80,000 employees, of which roughly 40% are represented by UTLA, which means that the outcome of these negotiations is an important factor in the district maintaining its current course of financial health and stability, Kroll Bond Rating Agency’s analysts wrote in an Aug. 31 report.
LAUSD holds Kroll's AA-plus rating with a stable outlook. Fitch Ratings rated the district's February general obligation bond deal AAA, based solely on the ad valorem tax property taxes backing the bonds, without regard to the district's financial operations. Moody's Investors Service rated the district Aa2.
Kroll analysts wrote in the report that UTLA has rejected salary terms similar to those received by other units, and instead is seeking a retroactive salary increase of 6.5% for fiscal year 2018 and possible future increases. The union also wants the district to take steps to lower class size, reduce standardized testing and implement “accountability measures” for charter schools.
“Total labor costs, inclusive of employee salaries and benefits, have grown by an average annual rate of 5.8% over the past three years,” according to Kroll analysts.
Employee benefit costs alone have grown at an average annual rate of 9.7% over the last three years, which outpaced the average revenue growth of 7.1% over the same period, Kroll said.
“Kroll believes that current labor cost growth is unsustainable if the district wants to maintain balanced operations, especially given the expectation that revenue increases will slow down after full implement of local control funding formula by fiscal year 2019,” its analysts wrote.
The local control funding formula will increase in fiscal 2020 at roughly 2.5% to 3%, which under a balanced operations scenario would have been enough to absorb increases in salaries, pension and benefits for employees and retirees, Kroll analysts wrote.
“The outcome of the UTLA contract negotiation may have a significant impact on the district’s ongoing financial operations,” Kroll analysts wrote.
UTLA said in its statement Tuesday that is has filed unfair labor practices with the state claiming that the school district is withholding financial documents needed for an audit.
The school district’s general counsel filed an unfair practice charge against UTLA with PERB for bad-faith bargaining two weeks ago.
