School Officials Dismayed by Pay Cut Ruling

State and local education officials were scrambling Friday to interpret the ramifications of a surprising court ruling that temporarily halted teachers’ pay cuts and injected even more uncertainty into the financial stability of the Los Angeles Unified School District and its teacher contract talks.

The next steps are unclear and depend largely on whether the court ruling is upheld. The district will not decide until Tuesday whether to appeal the ruling or begin issuing supplemental payments to make up for the cuts that were reflected in Friday’s paychecks.

Late Thursday, a Superior Court judge issued a temporary restraining order directing the nation’s second-largest district to stop deep pay cuts that were to take effect Friday and issue supplemental checks to about 35,000 teachers. A hearing on a permanent injunction is set for Nov. 25.

“If this order is sustained, the implications of this affect not only the L.A. school district, but districts throughout the county and throughout the state,” district Supt. Sid Thompson said.

If the order holds and the district is forced to eliminate the pay cuts, which were imposed to help cover a $400-million shortfall, Thompson said, the district’s $3.9-billion budget would be thrown out of balance and the district could be pushed into insolvency.

“We are in a serious condition if the budget is not balanced. I’m not prepared to say yet how we would balance it, but it would be horrendous,” Thompson said. “I’m not sure we could do it.”

The court action--initiated by United Teachers-Los Angeles as a long-shot move to prove to members that it was working aggressively to avert the pay cuts--shocked union leaders and school district officials, who had publicly predicted that it would fail.

The ruling came at a critical point in contract negotiations between the district and the teachers union. Both sides said Friday that the contract cannot be settled before the next court hearing.

“We want to put all our energies into finding a solution so that the district will not be insolvent--even if we win permanently,” union President Helen Bernstein said. “We are still faced with the same problems.”

But negotiators said their task has become far more complicated.

Union leaders said they cannot back down from their court campaign to head off the cumulative 12% pay cut. Negotiators said they will continue to push the district for a guarantee that teachers’ salaries will not be cut again next year, an assurance school board members have been unwilling to make because of the poor state economy.

The district did not move Friday to issue the supplemental checks. Thompson said he and other officials will be studying the order over the weekend. He did not rule out the possibility of appealing the temporary order.

Referring to the option of appealing the temporary order, Thompson said: “We are looking at all possibilities.” He added that the district’s intent is to comply with the order if there are no alternatives. Although the district’s attorneys said suspending the pay cuts would cost up to $120 million, Thompson said figures are still being worked out.

School board member Mark Slavkin summed up the situation as either a “very good move or a disastrous move” by the union. He suggested that both sides have time to work out a new contract offer that can be put to a union vote if the order does not stand.

If the district must stop the pay cuts without other ways to save money, insolvency proceedings or takeover by the county or the state could begin, triggering decisions that neither side would be able to control.

“At this point we are all going to rise or fall together,” Slavkin said.

At issue in the ruling was a provision in the state education code that requires school districts to set the salary schedule for credentialed employees before the July 1 start of the school year. The code section also pertains to credentialed administrators, such as principals, but Thursday’s ruling applies only to the bargaining unit represented by UTLA.

After notifying the teachers union in June that salaries would be reduced--with the exact amount to be determined after the state budget was adopted--the Los Angeles school board reduced salaries Oct. 2 to balance its own budget.

The ruling is being closely watched by other school districts because many of them also wait until after July 1 to set their salary schedules. Most unions accept this practice because it gives both sides greater flexibility in negotiations. State Supt. of Public Instruction Bill Honig said the court ruling could spell disaster for the Los Angeles district because salaries represent a large part of its budget, and it has few other areas in which to make substantial cuts.

“It would be a disaster for everyone in the entire district if they can’t work this out,” Honig said. “It could end up tying the district’s hands and forcing it into insolvency. Nobody wants that to happen.

“Lots is at stake here, including public attitudes about the district,” Honig said. Several of the district’s other employee unions clearly resented UTLA’s victory.

“It is appalling that these teachers are so thrilled over what has happened that they have not stopped to think about what this will mean for the students,” said Pearl Hinnant, president of Local 500 of the California School Employees Assn., which represents office and technical workers.

But some teachers said that the order only prolongs their salary uncertainties.

“For the next month we are going to be on pins and needles trying to figure out what is happening,” said Elizabeth Munoz, a teacher who wore black in a protest at Union Avenue Elementary School near downtown. She opened her check this morning to find a $400 drop from last month.

What happens next is unclear. The county Office of Education has authority to intervene when it determines that a school district is headed for financial trouble. The district also could ask the state for a loan in return for having Sacramento take over at least some of its spending decisions.

As a last resort, it could declare itself bankrupt, as the Richmond Unified School District did last year.

Deborah L. Simons, director of business advisory services for the Los Angeles County Office of Education, said the county has so far done nothing beyond asking the district Friday to project the effect on its budget that the court ruling would have if it holds up.

“This is a unique, very complex situation we’re dealing with here. We’ve never before had a situation in which the court has intervened,” Simons said. “It is much too early to speculate as to what might happen.”

If the county decides that the district cannot balance its budget, it would step in, with options ranging from providing budget review and advice to taking over the district.

“Our people are looking at this pretty carefully because it could have substantial implications for all school districts in California,” said Tom DeLapp, communications director for the Assn. of California School Administrators.

Many school boards and their unions wait to settle salary issues until after the state adopts its own budget, often well after the start of the school fiscal year.

“If the implications (of the Los Angeles court ruling) are that we must negotiate and establish salary schedules prior to knowing our absolute budget level, we are asking school districts to take a huge gamble on politics,” DeLapp said.