State Superintendent of Public Instruction Tom Torlakson has given Los Angeles Unified a one-year reprieve from a ruling requiring the district to spend potentially hundreds of millions of additional dollars on English learners and low-income children to comply with the state’s new school funding law.
In a letter to the district, Torlakson agreed to delay enforcement until 2017-18 of a California Department of Education ruling that found the district wrongly determined that as much as $450 million it spent on special education services also satisfied the Local Control Funding Formula’s requirement for additional programs and services for low-income students, foster youth and English learners.
His actions will buy time and may reduce the district’s financial liability but probably wouldn’t eliminate it. The district is asking Torlakson to reconsider the ruling and, failing that, L.A. Unified Superintendent Michelle King said the district would go to court to reverse it. At the same time, lawyers who filed a complaint on behalf of a neighborhood coalition that led to the ruling said they’ve grown impatient and also would turn to court if the department let the district off the hook.
The district “cannot continue to drag out this process while it continues to circumvent the Local Control Funding finance law,” attorneys for the nonprofit law firm Public Advocates and ACLU of Southern California said in the statement. “Too much is at stake for students who have already been hurt by the district’s decisions.” The law firms filed the complaint on behalf of the Community Coalition of South Los Angeles last November.
The district calculated that it would have had to spend an additional $245 million in 2016-17 and $395 million in 2017-18 to comply with the ruling. Doing so would create a financial crisis and force the district to raise class sizes significantly and to lay off or transfer 2,000 teachers to schools predominantly serving high-needs students, King wrote last week in a letter to Public Advocates and others involved in the case.
Last week, Torlakson dispatched Department of Education officials to meet with district administrators to explore how to avoid what Torlakson, in his letter to the district, called “budget disruptions” the ruling may create.
Other districts and advocates for low-income students, foster youth and English learners – the high-needs students that the funding law identifies for additional dollars – are watching L.A. Unified’s dispute. Federal law mandates rehabilitative services for all students with disabilities, but federal and state funding for decades hasn’t covered the cost, leaving school districts to pay about 40 percent – and rising – of the total. Districts are supposed to cover this expense from “base” dollars under the Local Control Funding Formula – money for general expenses of running a district, from salaries to electricity. L.A. Unified spends more than 20 percent of its General Fund on special education.
The funding formula also distributes additional “supplemental and concentration” dollars based on the enrollment of high-needs students, and districts are required to offer additional services and programs for them. These could include reducing student-teacher ratios, adding counselors in low-income schools and providing training on teaching English learners.
Closely watched case
In L.A. Unified, nearly 14 percent of students have disabilities, and four of five of them are considered high-needs students under the funding formula – about the same ratio as the district as a whole. Apparently only L.A. Unified, among the nearly 1,000 districts in the state, has declared that the bulk of the special education money it spent on high-needs students also fulfilled the requirement for spending for all high-needs students.
The neighborhood coalition argues that by double-counting $450 million in special education expenses, the district shortchanged high-needs students. The department, in a May 27 response, agreed with that position and called the district’s logic “strained.”
L.A. Unified insists that what it did was legal and appropriate. “I’m very confident in the context of the entire budget picture both the Department of Education and the courts will rule in favor of LAUSD,” board President Steve Zimmer told public radio station KPCC.
Torlakson in his letter indicated the district might be able to “significantly” reduce the amount of unfunded obligation if it could document special education expenses and other spending that met the funding law’s requirements. John Affeldt, managing attorney for Public Advocates, acknowledged that some things the district is currently doing could be counted as serving targeted kids, and the district could also redirect existing programs and services to principally benefit them. But he said the district will still have to provide more resources for these students.
L.A. Unified is facing a financial squeeze caused in part by declining student enrollment and unfunded retiree health benefits. This month, L.A. Unified was one of only 14 school districts to file a “qualified” financial status, meaning the district may not be able to balance its budget within the next three years. In 2015, a year after Public Advocates first warned the district it was violating the funding law’s spending requirements, the district approved a three-year, 10 percent raise for teachers.
In their statement last week, attorneys for the neighborhood coalition discounted King’s dire predictions of layoffs, massive teacher transfers and higher class sizes. The district “has many options for how to spend funds more equitably on its high-need students,” they said.
In a report issued last week analyzing the district’s use of funding formula revenue, UC Berkeley researchers led by Education and Public Policy Professor Bruce Fuller noted that spending in L.A. Unified has risen nearly $2,800 per student in inflation-adjusted dollars since 2006-07, before the recession. The district spends only an “unambitious” 6 percent of its total budget on high-needs students targeted by the formula, the report said, and it should be spending money on core initiatives to improve teaching and school climate instead of a scattershot approach funding 40 different programs.