The Los Angeles Unified School District adopted an $18.4 billion budget on Tuesday, June 25, staving off layoffs, maintaining funding for mental health support and Black student achievement initiatives, and increasing funds for arts education. But with the pandemic-era federal funding expiring and student enrollment falling, an uncertain fiscal reality looms.
The second-biggest district in the U.S. is spending more money than it’s bringing in. It is tapping into part of its $804.5 million “unassigned” ending balance, which is part of its reserve, to offset funding shortfalls. But the balance is projected to be depleted by the 2026-27 school year.
“This process was not easy,” LAUSD Superintendent Alberto Carvalho said at the Tuesday, June 25 school board meeting. “We’re not unique. This happened across the country. This is a dramatic shift, and there is no way of moving forward without some degree of impact.”
Another cost-cutting measure by the district is a reduction of the percent of “carryover funds,” which refer to the unused money that a school is allowed to keep from one year to the next.
Those funds are often used for extracurricular activities and school events. But for the 2024-25 school year, schools will retain 50 to 70 percent of their carryover funds, down from 60 to 80 percent in past years.
“Today is an important day for students and staff at LAUSD, with the budget,” said Juliette Alvarado, a student at Esteban Torres High School in East L.A. “We want 100% of our carryover funds in high-needs schools. This will affect me by limiting clubs and programs.”
The district expects to see 403,000 students enrolled in the 2024-25 school year, losing 83,000 students since the pre-pandemic 2018-19 school year when 486,000 students attended. Because funding for schools is based on enrollment and student attendance, the dwindling student numbers pose a challenge for district leadership.
Julien Lafortune, a research fellow at the Public Policy Institute of California whose work focuses on education finance, said the shrinking enrollment can be attributed to lower birth rates and families moving out of Los Angeles or out of California.
Declining enrollment is not unique to LAUSD, with fewer students enrolling in public schools in the majority of regions across California.
“(Lower enrollment) is something that school districts are grappling with, because if you have fewer students, you have lower funding,” Lafortune said. “Eventually, you have to downsize, and I think the problem becomes, how do you do that efficiently?”
Lower enrollment hasn’t affected all LAUSD schools to the same extent, but some schools, especially at the elementary school level, are seeing a significant number of empty seats.
Along with falling enrollment, the district’s funds are also strained by the expiration of federal pandemic relief, a dramatic $5.6 billion from Washington D.C. that was added to the coffers.
Despite these fiscal challenges, the district is committed to zero layoffs, and has avoided them in part by eliminating many vacant positions and reassigning some employees to different roles or schools.
“We all grapple with the sunsetting of the federal COVID-19 recovery funding,” Carvalho said at a June 18 LAUSD board meeting. “While other districts have been forced to lay off employees or impose furloughs, we have in fact invested in staff.”
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Many of the district’s employees received pay bumps this year, including LAUSD’s 30,000 service workers—including bus drivers, custodians, instructional aides, cafeteria workers and special education assistants—who got a $2 hourly wage increase in January 2024.
Blanca Gallegos, a representative of SEIU Local 99 Education Workers, which includes LAUSD service staff, said, “Staffing levels are key, and maintaining and ensuring that there’s sufficient staffing for student services is important to us. Even with the wage increases that workers won, they’re still at poverty level. We are working to address that and believe that the district’s budget needs to address that as well.”
The 2024-25 budget allocates to arts education an additional $30 million over previous years. Other highlights of the budget include investments of $334 million for mental health support, $162 million for dual language education and $88 million for school greening.
Nathan Cabrera, a student at Theodore Roosevelt High School in Boyle Heights, spoke at Tuesday’s board meeting, asking for greater student involvement in the budget and a greater focus on funding for high-needs schools.
“I want to attend a flourishing, well-kept school,” Cabrera said. “LAUSD is the model for the nation, so it’s time to invest more in high-needs schools.”