L.A. Schools Approve Spending Plan With $350M in Cuts

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SAN FRANCISCO - The Los Angeles Unified School District Board of Education on Tuesday approved a spending plan for fiscal 2008-2009 that includes $350 million of cuts from its current services.

General fund revenue is projected to decrease by $144 million, or 2%, to $6.85 billion from $7 billion in the current fiscal year. That's $350 million less than the district would need to maintain current service levels in the fiscal year that begins July 1. The budget plan passed this week is technically a set of guidelines for the provisional budget the board will adopt June 24.

The school district cannot pass a final budget until Gov. Arnold Schwarzenegger and the California Legislature agree on a budget that balances the state's $16 billion budget gap for the coming fiscal year. In the meantime, the LAUSD must plan for next year using the governor's May budget proposal, which would increase state education spending by just $193 million. Democrats in the legislature and school systems across the state are pushing for a bigger increase.

"This is the worst revenue proposal that we've had in many years," budget director Roger Rasmussen said. "We certainly hope that before the proposed budget is done that we get a better deal" from state lawmakers, who provide 90% of the district's operating budget.

Under the budget guidelines, the system would balance its books by requiring most workers to take unpaid furloughs and cutting more than 500 administrative jobs. The school board passed the plan Tuesday afternoon by a 6-to-0 vote with one abstention.

The district's 45,473 teachers have threatened to strike if they are asked to take pay cuts or layoffs. They came to work an hour late on Friday to protest the budget cuts.

This week's spending guidelines did not include specific plans for bond issuance.

The LAUSD, the nation's second-largest school district with almost 700,000 students, is in the midst of a $20.9 billion capital improvement plan that includes four voter-approved general obligation bond authorizations. The school board is also considering seeking voter approval for a fifth authorization that would increase the building program's size by another $3.2 billion.

The district tentatively plans to issue as much as $1 billion GO bonds under current authorizations this fall, said Timothy S. Rosnick, director of the district's treasury branch. He said he could not provide exact figures yesterday.

The district's GO debt is rated AA-minus by Standard & Poor's, Aa3 by Moody's Investors Service, and A-plus by Fitch Ratings.

The district also plans to issue about $500 million of revenue anticipation notes in August if the Los Angeles County Office of Education approves the sale.

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