LAUSD running out of cash as deadline looms to fix financial mess, parents told nothing is wrong

The nation’s second-largest school district is staring down a financial disaster.County officials have warned Los Angeles Unified School District (LAUSD) could run out of cash within two years, despite repeated assurances to parents that schools will continue operating as normal.LAUSD has been given 45 days to overhaul its budget after the Los Angeles County Office of Education concluded the district is headed toward insolvency, with projections showing its cash balance plunging $231 million into the red by November 2027, leaving it unable to make payroll.County Superintendent Debra Duardo issued LAUSD a rare “Lack of Going Concern” determination on July 2, warning the district may not be able to meet its financial obligations during the 2027-28 and 2028-29 school years.“They have some serious financial concerns that they need to address,” Duardo said to the Los Angeles Times.“It’s very serious.”The county says the crisis was driven largely by labor agreements the school board approved despite repeated warnings they were unaffordable.Those contracts, approved June 16, will add roughly $1.13 billion in costs this school year, rising to $1.44 billion by 2027-28 after double-digit raises for teachers, aides, custodians and other employees.County officials also blasted the district for failing to carry out about $231 million in planned budget cuts.On the same night it approved the contracts, the board overruled its own chief financial officer and withdrew $175 million from a retiree health benefits trust fund, a move the county said “further erodes confidence” in LAUSD’s budgeting.The district’s finances have also been squeezed by years of declining enrollment. LAUSD now serves about 390,000 students, roughly half as many as it did in the early 2000s, reducing state funding while staffing levels have not kept pace, according to the county.The district’s month-end cash balance is projected to turn negative in November 2027 and remain below zer...