News Summary
The Los Angeles Unified School District has approved an $18.8 billion budget while facing a significant nearly $3 billion deficit and declining student enrollment. Notably, student attendance has dropped by over 40% in two decades, compelling the district to withdraw from reserves for a second consecutive year. The budget prioritizes investment in marginalized student populations, including allocations for Black, immigrant, and LGBTQ+ students. LAUSD’s approach strives to maintain staffing levels and avoid school closures while navigating financial challenges and ongoing negotiations with employee unions.
Los Angeles – The Los Angeles Unified School District (LAUSD) has approved an $18.8 billion budget for the 2025-26 fiscal year, as the district faces a significant deficit of nearly $3 billion and continued declines in student enrollment. The decision comes during a challenging financial period, with the district drawing from its reserves for the second consecutive year to address a shortfall exacerbated by decreasing attendance numbers.
LAUSD reported an attendance figure of approximately 408,000 students, marking a decline of over 40% from two decades ago. This loss of students is critical as California’s funding model for schools is largely based on daily student attendance. Instead of making substantial cuts to programs and staff, LAUSD has chosen to maintain its current staffing levels and not close any schools, despite facing an unsustainable financial trajectory.
In light of this financial uncertainty, forged by rising costs and ongoing enrollment challenges, LAUSD’s budget will lean heavily on its dwindling reserves. Total revenues for the upcoming fiscal year are estimated at $15.9 billion, while the district’s unrestricted general fund stands at approximately $6.5 billion. Superintendent Alberto Carvalho has highlighted that the district is experiencing “uncertainty, instability, and a threat to public education,” underlining the urgency in managing its financial commitments.
The approved budget also includes plans for further investments aimed at supporting marginalized student populations. Allocations of $175 million are set to support Black students, alongside $5 million for immigrant students and $2 million for LGBTQ+ students. Additionally, $1 million is earmarked for creating greener school campuses. However, the budget has also raised scrutiny due to its exclusion of several potential future financial pressures that might arise.
California law mandates that districts facing financial insolvency develop a “fiscal stabilization plan.” LAUSD’s proposed stabilization measures include school closures, potential layoffs of non-school based staff, and established limits on budget carryovers for individual schools. These measures may prove necessary as the district expects a further decline of 6,491 students in enrollment for the upcoming year, estimating a drop from 402,561 to 396,070.
As LAUSD navigates its financial responsibilities, it is prolonging cuts to staffing while redirecting funds initially allocated to retiree health benefits to cover pressing financial needs. Health care costs for retirees have surged from $150 million a decade ago to a projected $315 million in the current budget year. The district is currently in negotiations with employee unions, with a 2% raise having been proposed for the largest union representing non-teaching staff.
While local districts such as Pasadena and Santa Ana Unified prepare to lay off hundreds of staff members due to their financial struggles, LAUSD’s approach has been characterized by attempts to balance the immediate need for fiscal responsibility with a commitment to enhancing equity and support within its schools.
Activists are claiming the budget as a pivotal victory for marginalized communities due to its specific funding allocations aimed at addressing historical inequities. Additionally, a revised budget eliminates $645 million in planned contributions toward retiree health benefits over three years to support higher employee compensation, which aligns with the ongoing discussions around adequate wage adjustments amid financial constraints.
The budget process has also been influenced by significant federal pandemic relief funds that are now nearing depletion, leaving LAUSD to confront the reality of impending financial crises. The district’s board faces the dual responsibility of preparing for potential economic challenges while striving to maintain service levels within the educational framework.
The 2025-26 budget approval reflects LAUSD’s efforts to navigate a complex financial landscape impacted by decreasing enrollment, rising operational costs, and the press for equitable funding for diverse student groups. With the landscape shifting, it remains critical for the district to promptly address these challenges while safeguarding the educational needs of its students.
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Additional Resources
- NBC Los Angeles
- Wikipedia: Education in California
- Los Angeles Times
- Google Search: lausd budget 2025
- Read Lion
- Google Scholar: LAUSD budget crisis
- LA School Report
- Encyclopedia Britannica: California schools
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