A 2018 Evaluation of LAUSD’s Fiscal Outlook: Revisiting the Findings of the 2015 Independent Financial Review Panel

The Los Angeles Unified School District (LAUSD) faces immense fiscal challenges. The district has lost more than 245,000 students in the last 15 years. Deficit spending is projected to drain the district’s reserve level from 11.64 percent of total general fund expenditures in 2016–2017 down to a projected -5.61 percent by 2020–2021—even assuming five years of substantial revenue growth from the state of California. The most recent audit of the school district (through June 30, 2017) found that LAUSD had liabilities that surpassed assets by $5.1 billion and an unrestricted net position (which must be paid out of future general fund unrestricted revenue) of -$10.9 billion.

These numbers from the latest audit actually understate the district’s liabilities because a more recent 2017 actuarial valuation report, released in April 2018, increases the district’s health care benefit liabilities (aka Other Post-Employment Benefit, or OPEB, debt) from $13.7 billion in 2015 to $15 billion in 2018. On a per-pupil basis, the OPEB debt alone is about $30,000 per student for each of the 500,000 students currently enrolled in LAUSD.

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