Fewer Kids, More Payroll: LAUSD’s Math Problem

This week, California’s school finance watchdog rated Los Angeles Unified at high risk of insolvency. The district’s own numbers explain why. Between 2019-20 and 2024-25, enrollment fell from 440,365 students to 369,830, a drop of 16%. Over the same stretch, full-time-equivalent employment rose from 60,344 to 64,148, according to the Los Angeles Times. By my arithmetic, that’s 7.3 students per employee shrinking to 5.8. I spent decades in private credit, and no lender I’ve worked with would book that loan.

Here’s my argument. The union did its job and won pay. The school board approved the bill. The children, who never sat at the bargaining table, inherit a plan to eliminate more than 6,000 positions over three years and a scoreboard on which 60% of students still miss the state math standard. Leaders who can’t match payroll to enrollment have no business asking parents for patience.

Start with the contract. The April tentative agreement raised teacher salary scales 11.65% and set a $77,000 starting salary. In June the board approved the multi-union contracts over county warnings that they cost too much, adding about $1.13 billion this school year and $1.44 billion in 2027-28. UTLA delivered for its members, and I’d have done the same in its chair. The board then overrode its own chief financial officer to pull $175 million from a fund set aside for retiree health benefits. 

Some of the hiring rode on temporary pandemic relief, and the Times reports that “the funding stream to keep most of these employees has ended.” The state report adds that the district granted raises that exceeded the rate of increased state funding. Meanwhile the buildings emptied. LAUSD has seats for about 718,475 students and enrolled only 353,065 this year, a utilization rate near 49%, with 481 of its 738 campuses at or below 60% of capacity. Ferris Bueller’s economics teacher would know that room. Anyone? Anyone? Special-education costs paid by the district also rose from $957.1 million to $1.49 billion in two years. Those services are legally required, and the kids who need them deserve every dollar. They still have to fit inside one budget.

Now the scoreboard. In 2025-26, 48% of LAUSD students met or exceeded the state standard in English, 40% in math, and 32% in science. That’s actually an improvement, and the teachers and kids who earned that deserve credit. Even so, three in five students miss the math standard and two in three miss science. The spending-cut plan also trims funding for high-needs schools, the campuses where kids can least afford a shortfall. Even the union warns that cutting programs will drive families away, which shrinks enrollment further and restarts the loop. 

UTLA argues the state analysis penalized the district for paying teachers more, while consumer prices in Los Angeles have climbed nearly 30% since March 2019. A teacher who can’t afford to live near the school won’t stay, and I have no interest in underpaying the people at the front of a classroom. The union also notes that the state’s own analysis rated the district at moderate risk until a prior county determination raised the label to high. I’ll grant both points. Then read the cash line. Michael Fine, chief executive of the state’s fiscal crisis team, told the Times, “It is a serious situation.” The state team warned the district could exhaust its reserves by the end of the next school year, with a projected $231 million cash shortfall in 2027. I have no quarrel with fair wages. My quarrel is with a payroll sized for a district that no longer exists.

Why can’t the district simply right-size? State law and union contracts both narrow the options. Under Education Code 44955, layoffs follow “the inverse of the order in which they were employed,” with limited exceptions, and the Legislative Analyst’s Office has called the result a “last-hired, first-fired policy”. Performance never enters the equation. The reporting doesn’t say how many of those 6,000 positions will go through layoffs rather than attrition, but when layoffs come, years of service will largely decide who stays. The 2027-28 furlough plan must also be bargained with the unions first. Each rule has a defensible purpose. Together they leave management little room when revenue shrinks. Both rules were on the books when the board signed the contracts, so neither explains the choices that followed.

Here’s what I suggest. A quarterly public scorecard showing recurring revenue against recurring compensation. Staffing by function and by school, rather than one headcount. Vacancies and turnover in hard-to-staff positions. Achievement growth by student group, plus attendance and graduation. A plain statement of whether each cut protects instruction that works. Published before the next bargaining session, not after. Beyond that, match staffing to enrollment, consolidate campuses running at half capacity, put layoff criteria on the bargaining table so effectiveness counts alongside years of service, and tie future raises to recurring revenue the district can document. Parents and taxpayers deserve the view of the books that a lender gets.

The Socratic method still shapes how teachers question students, so let me close with four questions for the board. How many employees does a district of 353,000 students need? Which of the 481 under-filled campuses can it consolidate? What did the last raise buy inside a classroom? And who will explain the answers to parents at the next meeting? Enrollment sits outside the board’s control. Payroll, transparency, and results sit inside it. The kids didn’t negotiate any of this, and they’re the ones who will pay for it.