The Los Angeles Unified School District board approved a new three-year teachers' agreement on Tuesday, but officials estimated the deal will result in a $559 million deficit over the next two years.
Officials said they're confident additional state funds from an improving economy will pay for the 10 percent raise in the contract. Whether those funds will materialize should be known next month as Sacramento revises its projected budget for the next fiscal year.
But those dollars are not a guarantee, said Board Member Monica Ratliff.
"We're going to have to come up with an alternative plan in case the May Revise (the revised state budget) doesn't work out the way we'd like, and that will probably involve program cuts, layoffs, modifications, and things like that," she said.
The district has already threatened cuts to its preschool program and adult education.
Alex Caputo-Pearl, president of the 31,000-member United Teachers Los Angeles union, said he's working with Superintendent Ramon Cortines to look for additional funds to help pay for the teachers' pay package. He said officials are pushing Sacramento for money that was lost due to massive problems with LAUSD's troubled student data system, known as MiSiS.
"That's tens of millions of dollars," Caputo-Pearl said.
The tentative agreement, struck Friday night, will give teachers, counselors and coaches their raise of 10 percent in increments. They would receive a pay raise of 4 percent retroactive to July 1; 2 percent retroactive to Jan. 1; 2 percent on July 1 this year; and 2 percent on Jan. 1, 2016. In the third year, the agreement calls for a salary reopener that will allow the two sides to negotiate possibly more raises.
The UTLA contract will cost a total of $514 million, LAUSD Chief Financial Officer Megan Reilly said. That is in addition to a three-year, $3.3 billion health care benefits package approved by the board last week.
"Including this additional burden, we are currently projecting a deficit of $140 million in 2015-2016 and a $419 million deficit in 2016-2017," Ratliff said in a statement. "Combined, we are anticipating a deficit of over half a billion dollars. This is not even taking into account our unfunded OPEB (post-employment benefits such as pensions) liability of $11 billion."
She said she and district officials have said LAUSD "does not have excess funds of such amounts lying around the District." The economic feasibility of all of the recent labor agreements depends heavily on Gov. Jerry Brown's revised budget, Ratliff said.
Other parts of the agreement would create a three-tiered teacher evaluation system, a cap on class sizes for English and math classes in grades 8 and 9, more counselors, and changes to the teacher grievance process that were sought by the union.
“The Board gave direction to the Superintendent and staff today to allow the negotiated Tentative Agreement to be forwarded to UTLA for ratification by the membership," the district said in a statement Tuesday.
The board voted unanimously in closed session to move the contract forward.
At a news conference after the board vote, union leaders and board members stood side by side and said the contract will go a long way toward improving education in Los Angeles by reducing class sizes and giving teachers their first pay raise in eight years.
That raise was a priority, board members said.
Once the agreement is ratified, the "Agreement will come to the Board for action with all of the necessary supporting documents," the district stated.
This story has been updated.