A California appellate court was expected to decide last Friday on the Los Angeles school board’s appeal of a Nov. 5 court order that temporarily blocked the board from cutting teacher pay and raised the threat of bankruptcy for the nation’s second-largest school district.
“If this court order is made permanent, we will be looking at an additional $180 million deficit,’' Leticia Quezada, the school board president, said in an interview. “This will certainly mean bankruptcy for the district.’'
Ms. Quezada said the Los Angeles Unified School District would ask the appellate court to nullify the temporary restraining order by the Los Angeles superior court and relieve the district from making retroactive payments to teachers by Nov. 24.
The district is trying to buy time before the superior court makes a final decision on the cuts in a hearing scheduled for Nov. 25, Ms. Quezada said.
District officials have told the United Teachers-Los Angeles that if the lower court’s ruling is upheld and teacher pay is not reduced, the district could afford the extra $20 million a month in salaries only for a few months.
“So, we’ve talked about layoffs of 4,500 people and increasing class size by 20,’' Ms. Quezada said.
While the board president characterized those steps as last resorts, the district is already sagging under the weight of a $400 million deficit.
Ms. Quezada said many of the savings proposed by the U.T.L.A. have already been incorporated in the district’s $3.9 billion budget.
But union officials said they have turned up new ways the school board could avoid both the pay cuts and the school system’s continuing financial distress. They said the union has been proposing the savings in talks with the district.
“We have made that giant step to say, ‘O.K., we’ve got to do things differently,’ '' said Catherine M. Carey, the union’s communications director.
“But if the people over at central headquarters keep up business as usual,’' she said, “then they will run the district into insolvency.’'
Cuts Total 12 Percent
The district and the teachers’ union have been trying to iron out a contract dispute that began when the board voted Oct. 2 to close the district’s budget gap by adding a 9 percent pay cut to the 3 percent already trimmed from teachers’ salaries last year.
When it became clear that the two sides would not reach an agreement before the new cut was scheduled to take effect, the U.T.L.A. went to court to block the cut. The union’s lawyer, Lawrence Trygstad, argued in superior court that the district could not legally “tamper with salary schedules’’ after the start of the contract year on July 1.
Judge Stephen E. O’Neil issued a temporary restraining order Nov. 5 rescinding the 9 percent cut. Since paychecks issued to teachers on Nov. 6 reflected the cumulative 12 percent cut, the judge gave the district until Nov. 24 to pay back to the 28,000 teachers affected the amount of the latest cut.
The 11th-hour ruling surprised even union officials, who had viewed their court action as a long shot.
“This was unprecedented,’' Ms. Carey said of Judge O’Neil’s order.
The union canceled a one-day walk-out it had scheduled for Nov. 13, since the court ruled that the restraining order would stand only if no strike activity occurred.
Role of County Department
The district is reeling at the likely financial ramifications if the court’s order is made permanent.
Officials estimate that a permanent order to retain the teachers’ salary schedule could cost $180 million this fiscal year--money the district does not have in its coffers, according Superintendent of Schools Sid Thompson.
If the Los Angeles Unified district becomes insolvent, the Los Angeles County Department of Education--an intermediate level in the state’s system of school governance--has the authority to intervene in order to force the district’s budget into line. The county department can order a financial review or assume all budget decisions.
Last week, the county asked district officials to prepare a financial report based on the worst-case scenario for the Los Angeles Unified system.
The state can intercede only if the situation cannot be managed by the localities, according to officials at the California Department of Education. The legislature would have to grant the power to send a state-appointed trustee to the district.
“We’re trying to stay out of it,’' Susie Lange, a public-information officer for the state education department, said last week.
“Some districts have ended up with a state trustee, but only after months of trying to solve their problems on their own,’' she added.
Union’s Prescriptions
Helen Bernstein, the president of the U.T.L.A., has maintained that the district can avert financial ruin with a hiring freeze and a “drastic redirection of funds.’'
The union has suggested, for instance, that the district eliminate “nonessential’’ programs that serve few children, or seek private contributions for extracurricular programs.
“After-school athletics are wonderful, but why not ask local professional teams to supplement those programs?’' Ms. Carey of the U.T.L.A. said.
She also suggested looking for underwriters for drama, music, and dropout-prevention programs.
The union has proposed all of these cost controls under the rubric of “gains sharing’': If the workers find a way to save money, the union has argued, the savings should come back to them.
But Ms. Quezada, the school board president, said the cuts the union is proposing in lieu of salary reductions would shortchange the district’s 645,000 students and anger parents.
“Parents would not like cutting sports’’ or arts funding from the school budget, she said. “These are all part of a child’s education.’'
Besides, district officials said, the union’s savings plan might not match up with the cost of permanently restoring teacher salaries.
Ms. Bernstein and Superintendent Thompson met in closed session last week, and lawyers for both the district and the union continued to explore their options.
Union officials said the district’s bargaining team has been more receptive to the U.T.L.A.'s ideas since the restraining order was issued.
According to Ms. Quezada, the district’s “intent is to keep having these meetings with the union and try to find a way out of this mess.’'
