Los Angeles County Office of Education

The Los Angeles Unified School District (LAUSD) approved nearly $1.2 billion in labor contracts despite warnings from the Los Angeles County Office of Education (LACOE) that the deals would cause a financial crisis and lead to thousands of layoffs.

Los Angeles Unified School District (LAUSD) faces a crisis as it must revise its $20.6-billion budget to avoid a potential takeover by the Los Angeles County Office of Education. Failure to act could disrupt thousands of families and destabilize the district.

LAUSD is at risk of insolvency due to financial shortfalls, rising labor costs, declining enrollment, and leadership instability. The Los Angeles County Office of Education has mandated a revised $21 billion budget by mid-August to avoid an external financial advisor being appointed.

The Los Angeles Unified School District must prove it can manage finances within 45 days or face losing budget control to outside fiscal overseers. The article calls this a deserved humiliation for the second-largest school district in the U.S.

Los Angeles County officials warned LAUSD it risks insolvency due to unsustainable spending, new labor agreements, and declining enrollment. The county demanded budget revisions by mid-August and may appoint a fiscal advisor with overruling authority if changes are insufficient.

Inglewood Unified School District is nearing the end of state receivership after meeting 153 financial and operational standards, potentially regaining local control in 2027. The district improved its management systems, including utility bill monitoring, and has maintained progress since 2023. The state initially took over in 2012 due to a financial crisis involving misstated attendance and salary costs.

The Los Angeles Unified School District faces a $1.3 billion deficit in 2027-28 and a $3.6 billion deficit in 2028-29, prompting consideration of cuts to equity programs like the Student Equity Needs Index and Black Student Achievement Plan, which could lead to thousands of layoffs. Community advocates argue these cuts contradict the district's commitment to equity, while district leaders claim fiscal stabilization is necessary to avoid depleting reserves.

The Pasadena Unified School District is finalizing its 2026-27 budget as the Los Angeles County Office of Education requests an updated Fiscal Stabilization Plan. The district plans to address the request while collaborating with the county and the state's Fiscal Crisis and Management Assistance Team.