LAUSD faces ‘severe’ signs of insolvency; county warns it could take control of budget

Los Angeles Times ^ | July 9, 2026 2:06 PM PT | Jaweed Kaleem, Howard Blume and Kori McNair

[E. Pluribus Unum]

• Los Angeles Unified is facing “severe” signs of insolvency, with county officials projecting a $231-million cash shortfall by late 2027.
• County education authorities have appointed a fiscal expert and have given the school board 45 days to fix its budget or risk outside control.
• Costly union contracts, stalled cuts and steep enrollment declines helped drive the troubles.

The Los Angeles Unified School District faces “severe” indications that it will be insolvent by November 2027 — falling $231 million into the red and unable to make payroll — county analysts have concluded, setting up a 45-day deadline for the school board to amend their budget or face losing significant future authority over spending decisions.

The county has appointed a “fiscal expert” to work with the district to eliminate the projected deficit. If that effort falls short, county authorities will appoint an official empowered to overturn school board spending decisions, according to the letter sent to L.A. Unified.

The July 2 notice, from county education office Supt. Debra Duardo to L.A. school board President Scott Schmerelson, said the district’s recent budget adoption “erodes confidence” in its decision-making. The county attributes the crisis largely to union contracts it repeatedly warned L.A. Unified officials the district could not afford. The projected annual cost of the union settlements and employee raises is well over $1 billion a year.

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“They have some serious financial concerns that they need to address,” Duardo said in an interview Thursday. “It’s very serious.”

The letter formally issues LAUSD a “Lack of Going Concern” determination, meaning the district may not be able to meet its obligations in the 2027-28 and 2028-29 school years. It is a step the Los Angeles County...

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TOPICS: Education
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[Leaning Right]

Maybe the Los Angeles Unified School District should hire more supervisors and more DEI consultants.

That’s what a big school district near me did. And they’re doing just fine!

Oh, wait. That district is a huge mess, a huge and unfixable mess.
So never mind.

[Made In The USA]

Interesting recurring relationship between liberalism, high taxes, and budgets teetering on insolvency.

[Mark]

Robots can clear this up. A lot of unemployed though.

[Kenny Bania]

Oh, won't somebody please think of the education bureaucrats?!?!?!    /s

[Red Badger]

They spend billions of dollars each year and turn out students that can’t read, do simple math an know nothing of history, civics or science.

IOW, perfect Democrats.................

[dfwgator]

They got what they voted for.

[Scrambler Bob]

Will this affect retirement payments?