With Los Angeles Unified School District Superintendent Alberto Carvalho resigning, reportedly under an FBI investigation, the district quickly named longtime LAUSD administrator Andrés Chait to replace him, rather than conducting a nationwide search. Parents and taxpayers must hope Chait is more ready to prioritize students over unions, tackle the district’s declining enrollment, overstaffing, and major financial problems than his predecessors were.
LAUSD spends more than $30,000 per student and just moved forward with a budget plan to spend over $20 billion in 2027 that calls for draining financial reserves and laying off 1,000 staffers. But sustainability isn’t LAUSD’s only fiscal problem. The district is shortchanging classrooms, prioritizing non-teaching positions and spending tax dollars on things that don’t meaningfully move the dial on student achievement.
To fix its financial woes and improve academic outcomes, LAUSD needs to get its priorities straight. Nearly half of the district’s 4th graders are reading below the basic level on the latest National Assessment of Educational Progress.
Reason Foundation research shows how far LAUSD’s spending has drifted from the public education system’s core academic mission of serving students. From 2013 to 2023, LAUSD’s enrollment fell by 34.7%, going from 655,455 students to 427,795, according to the National Center for Education Statistics. Despite losing more than 200,000 students, LAUSD’s inflation-adjusted spending on employee compensation grew by about $1.7 billion, or 27%, during the same period.
As part of the increase in spending, LAUSD chose to invest heavily in non-teaching staff rather than increase teachers’ pay. Only 5% of the $1.7 billion rise in compensation spending since 2013, about $85 million, went to teachers.
The district’s largest increase in compensation spending, about $315 million, went to administrative positions. Inflation-adjusted spending on administration grew from $368.2 million in 2013 to $683.4 million in 2023. This includes both central office and school staff with a broad range of responsibilities, including special education, compliance, instructional oversight, and other duties.
But what stands out most is LAUSD’s spending on counselors, nurses, social workers, and psychologists, which collectively grew by $380 million. LAUSD has embraced the “whole child” approach to K-12 education, expanding its responsibilities beyond academics.
“Instead of viewing schools as places focused on reading, writing, math, and other academic subjects, these models also prioritize children’s physical, mental, and emotional health, community engagement, and social environment,” said Maria D. Fitzpatrick, professor of economics and public policy at Cornell University’s Brooks School of Public Policy.
But research on community schools, social-emotional learning, and other whole-child strategies is far from conclusive, with some studies showing negative effects for students. It makes little sense for LAUSD to prioritize these things over hiring and retaining effective teachers, which research shows is the most important school-related factor in improving student achievement.
The state also shares some of the blame for LAUSD’s unproductive spending. Reason Foundation finds employee benefit costs, including pension contributions and health insurance, are becoming increasingly expensive for the district. Between 2013 and 2023, LAUSD’s inflation-adjusted annual benefit spending increased by $756 million, or 59%.
Benefit spending, driven largely by unfunded pension liabilities, is consuming an increasingly large share of the district’s employee compensation. For years, California has underfunded the pension promises made to teachers, and now the bill is coming due.
LAUSD’s recent labor agreements with United Teachers Los Angeles and other unions will make its fiscal situation even worse. The deals, which include a 24% wage increase for service employees, a 12% average salary bump for teachers and administrators, and hundreds of new support staff positions, are estimated to cost the district an additional $1.2 billion each year, money LAUSD does not have but hopes to receive from the state.
Rather than hoping for an influx of state taxpayer dollars to delay its financial reckoning, LAUSD’s next superintendent should begin implementing the reforms necessary to best serve its remaining students, including significant reductions in non-teaching staff and the closure of under-enrolled schools that are costly to maintain and spread resources thin.
With its high costs and dramatically declining student enrollment, LAUSD has far too many employees. The reported 1,000 layoffs in the upcoming budget plan are just a start of what is needed to right-size the district’s workforce and direct resources to classrooms, where they have the greatest impact. Reducing the budget deficit, improving student outcomes, and ensuring students and families can access the high-quality education they deserve must come before union interests and politics.
Aaron Garth Smith is the director of education reform at Reason Foundation, and Jordan Campbell is the managing director of government finance at Reason Foundation.