The Brief

L.A. County Office of Education’s letter to Los Angeles Unified School District earlier this month, warning it was at risk of running out of money, has escalated tensions between county overseers and the state’s biggest school district.

LACOE has told the district it must revise its $21 billion budget by mid-August — or risk the appointment of an external advisor with the power to override the LAUSD board and superintendent’s decisions.

The district has already announced the elimination of hundreds of jobs, primarily in its administrative offices, and approved another plan to cut an estimated $3.6 billion over the next three years through furloughs, layoffs and school consolidations.

But LACOE says it wants a more specific plan with more details, and has assigned a fiscal expert to help.

What does it all mean — for teachers, staff and most importantly, the almost 400,000 students in LAUSD schools? We break it down.

What’s in the letter?

The letter outlines a list of why the County has determined the district will become insolvent.

These include:

• Running out of money: The district's own projection has shown that its operating cash will be $231 million in the red by November 2027. “A district that cannot maintain a positive cash balance is unable to meet payroll and other obligations as they come due,” wrote Debra Duardo, the L.A. County superintendent. 

• New labor agreements with teachers, principals, school support staff and other employees: Recently approved contracts, which the unions say are essential to helping employees weather the region’s increasingly high cost of living, will cost an additional $1 billion in the next school year. These increases outpace the state’s  cost of living increases. 
  
• Declining enrollment and attendance: About 40% fewer students attend LAUSD schools than two decades ago, in part because of lower birthrates and families leaving because of the region’s high cost of living. Over time, this can reduce revenue because state funding is calculated based on how many students show up for class each day. 
  
• Leadership stability: The LAUSD Board appointed Andrés Chait, a longtime district administrator, as superintendent in June, just days after his predecessor resigned amid an ongoing federal investigation. ”This transition occurs at the moment the district must execute substantial corrective actions,” Duardo wrote.

It also includes next steps. We’ll discuss those below.

Why did LACOE send the letter July 2?

The letter is part of a process outlined in California law meant to prevent districts from going bankrupt.

Specifically, LACOE is required to intervene anytime it determines the district may be unable to meet its financial obligations in the current or subsequent two years (California requires districts to budget in three-year blocks.)

Has this happened to LAUSD before?

The requirement to issue this letter is fairly new and tied to a 2021 change in state law.

However, LACOE has intervened in LAUSD’s finances in the past. The agency assigned a fiscal expert team to the district from January 2019 to December 2021 after determining the district was at risk of not meeting its financial obligations.

The team helped analyze staffing, enrollment and make adjustments to the budget, according to a statement provided by Elizabeth Graswich, executive director of LACOE’s public affairs and communications department.

How did LAUSD get to this point?

The shortest explanation is that LAUSD is spending more money than it brings in.

The last three budgets relied on billions of dollars in reserves to offset the deficit.

Some of those reserves were built up when the district was receiving federal pandemic relief money and that funding ended in 2024.

LAUSD, like other districts in the state, also faces increased costs on everything from employee salaries and benefits to providing services for students with disabilities and settlements for decades-old sexual assault claims.

The district’s unions, parents, and several board members have also called for increased scrutiny on how much money the district spends on third-party contracts, including with tech companies.

Is LAUSD making cuts? How will they affect students?

LAUSD has already eliminated hundreds of jobs, primarily in its administrative offices, earlier this year.

This summer the board approved another plan to cut an estimated $3.6 billion over the next three years.

That plan includes furlough days for all employees, the elimination of thousands more jobs and cuts to the trust that funds retiree health benefits.

Among the cuts is the elimination of $900 million that helps high-needs schools pay for counselors, tutors and other student supports.

Most of these cuts aren’t scheduled to go into effect until the 2027-28 and 2028-29 school years.

The county said in its letter that the district plan needs to be more specific and include how each proposed change will be implemented, when the change will happen and how the outcomes will be measured.

Has there been any push back to the letter’s findings?

The district did not appeal the letter’s findings to the state, according to a district spokesperson.

However, when LAist asked if the district disputed any of the findings, a spokesperson wrote that the district is quote “continuing conversations” with the County, and that a revision to the budget may not be required.

“We will remain in conversation with LACOE to ensure our financial plan remains responsible, transparent, and aligned with our long-term commitments,” the spokesperson wrote.

The teachers union has said the letter unfairly targets the union’s new contracts.

“To me it feels as though the message is, ‘We warned you not to approve these contracts, and yet you did, and now we're going to overstep,’” said Gloria Martinez, president of United Teachers Los Angeles.

Martinez said the overall problem is that California doesn’t adequately fund public education.

We’re about a month away from the start of the next school year. What happens next?

The county has appointed a fiscal expert to help the district revise its budget by mid-August. Otherwise, the county says this advisor could be given the power to override decisions by the board and superintendent.

What happens if the district runs out of money?

Districts that become insolvent can lose the power to govern themselves in an arrangement called receivership. Instead of the elected school board and appointed superintendent making decisions about everything from curriculum to the budget, that power is transferred to an external administrator.

Receivership is a condition of accepting an emergency loan from the state. Only 10 school districts, out of nearly 1,000 statewide, have entered receivership since 1990, including Inglewood Unified.

The impact on students varies from district to district. The process was designed to protect students from sudden school shutdowns, but it comes at a cost. Districts must pay back the emergency loan and community-members lose the ability to elect or recall decision-makers during the receivership.

Contact your school board member

The LAUSD's Board's next meeting is a closed session scheduled for 10 a.m. Tuesday, Aug.11.

An employee of Los Angeles County’s Office of Emergency Management has sued his employer, alleging he was retaliated against for making whistleblower complaints about the response to the deadly Eaton Fire.

Nicholas Vaquero, an associate director in the Office of Emergency Management, alleges that officials leading the office failed to properly staff the response to the fire, which killed at least 19 people and burned thousands of homes and businesses in January 2025.

He also alleges the county’s emergency alerts were inadequate and that it submitted fraudulent data in order to receive FEMA reimbursement. Vaquero says in the suit that he used official county whistleblower channels to raise his concerns, in addition to speaking to OEM’s top two officials, Director Kevin McGowan and Deputy Director Leslie Luke.

Vaquero’s lawyers and the county declined to comment on the substance of the lawsuit. “L.A. County is going to address the allegations in court,” spokesperson Elizabeth Marcellino wrote in a statement to LAist.

LAist previously reported on Vaquero’s whistleblower complaint, in which he alleged that a now-retired employee with “a long history of sleeping on the job” was put in charge of emergency workers sending evacuation alerts and was asleep during critical moments of the first night of the Eaton Fire, when many of the deaths and much of the devastation occurred.

In the lawsuit, Vaquero alleges he has faced retaliation after raising his concerns, including being excluded from meetings he previously was a part of and being treated with hostility by the department’s leadership, among other things.

The complaint comes after county leadership launched a three-year restructuring of the Office of Emergency Management, which includes working to add staff and to conduct regular training for all staff on emergency alert software.

An after-action report from the McChrystal Group highlighted that the emergency management office was severely short-staffed during the fire. The department, which serves 10 million people, had a staff of 37 people at the time the fires broke out. Meanwhile, New York City has a population of 8.5 million and an emergency management staff of about 200 people, the report noted.

For the last three years, the record store and music venue Healing Force of the Universe has been operating on a sleepy street corner not far from Pasadena City College. Nearby businesses include a shoe repair store, a nail salon and several auto shops.

“We're kind of in a dead corner,” owner Austin Manuel said. “No offense if anybody lives here, but not a very foot-trafficked area, kind of a hard place to have a store.”

In spite of the location, Manuel said Healing Force has become a home away from home for musicians and music fans. One of them is Bobby Bradford, a jazz trumpet legend who lost his house and personal archive in the Eaton Fire. He performs regularly at the venue. (Healing Force has also partnered with LAist on fire recovery events.)

Its current location is set to close this month, but Manuel and his team are already raising funds to cover a move to another space: G-Son Studios in Atwater Village. The repurposed ballroom was the Beastie Boys' home base when they recorded their classic albums Check Your Head and Ill Communication. Run-DMC and Biz Markie stopped by at one point, and Beck also laid down tracks for his album Odelay there.

Inside Healing Force's space in Pasadena.

(

Kevin Tidmarsh/LAist

)

The vibe

Healing Force sells records, of course, but these days it’s more of a nighttime performance space. Manuel said he wants people to feel comfortable striking up conversations after a show.

“I grew up in the church in the South, and I was like, ‘How do I design this so that it feels like a Southern church lady could come in here and feel welcome?’" Manuel said. “ I didn't want it to be too cool.  I wanted it to feel kind of suburban in a way.”

(

Kevin Tidmarsh/LAist

)

(

Kevin Tidmarsh/LAist

)

(

Kevin Tidmarsh/LAist

)

Though the name might call to mind a cult slogan — and Manuel said they lean into that aesthetic on purpose — it’s actually a reference to the 1970 album Music Is the Healing Force of the Universe by saxophonist Albert Ayler.

At the venue, “people can kind of get … into a meditative zone,” Manuel said. “After the [January 2025] fires, it felt so good to come back together in this room and feel the healing of community.”

Healing Force's stage setup.

(

Kevin Tidmarsh/LAist

)

The performances

The shows Healing Force puts on share a common thread: They’re meant to promote peace and relaxation, as well as deep, careful listening on the hi-fi sound system. But they’re an eclectic mix of genres. On one night, you might see L.A. spiritual jazz band Phi-Psonics, who turned a residency at the venue into a live album, Expanding to One.

On another night, you might catch a spaced-out electronic set, an up-and-coming singer-songwriter or a group of session musicians who’ve played with the likes of Paul Simon, Elton John and Lucinda Williams.

About the fundraiser

With the new space on Glendale Boulevard, Manuel said, Healing Force would triple its capacity for concerts, get a bar space and be closer to other venues in Northeast L.A.

“If 1,000 people gave $25, we would get there,” Manuel said – though he also said most people have been giving more.

You can read more about the fundraiser and donate at Healing Force’s GoFundMe.

See the Pasadena space before it closes

The venue is still open at 1200 E. Walnut Street and is holding events through this Halloween weekend. You can see their events calendar on their website.

The racist DNA of Jim Crow discrimination may be embedded in your housing documents.

The language in housing documents that restricts sale or use of a property only to a person of the white race is called a “restrictive covenant,” and in California the practice goes back to the 19th century and continued into the mid-20th century. While housing discrimination persists, the practice was found unconstitutional in 1948.

California counties are reporting mixed progress in meeting the demands of a 2021 law to excise the language from property records.

According to Sylvia Manzo, deputy recorder in the Orange County Clerk-Recorder’s office, the county finished the job in March of this year, removing racist language from more than 27,000 property documents with the help of computer software.

This 1924 property document from Bakersfield includes racist language limiting use of the property in question to people of "the white or Caucasian race."

(

Screenshot from CSU Bakersfield

)

L.A. County is far from done. It says that with the help of an outside company hired in 2024, 50 million pages will be examined yearly, which would take about 10 years to finish the job.

Public agencies could use the public’s help.

Language examples

Here’s a 1924 example from a property in Bakersfield. The text reads, “That the lands herein conveyed shall never, at any time, be sold to or rented to or occupied by any person not of the white or Caucasian race.”

Or this language from a 1936 document relating to a Costa Mesa property: “That said premises shall not be sold, conveyed, rented, or leased to, or occupied by any person of African, Mexican, or Asiatic descent.”

How to get it taken out

The Restrictive Covenant Modification Form is at the heart of the effort to remove the racist language from housing documents. Each county has its own process. Some charge a fee; others don’t. Some require a notary certification for the signature; others don’t.

L.A. County:

Registrar-Recorder officials recommend these steps:

• Highlight or underline the unlawful provision on the recorded document
• Complete the Restrictive Covenant Modification Form
• Submit the form and the recorded document by email: RCM@rrcc.lacounty.gov or in person at the Norwalk headquarters at 12400 Imperial Highway in Norwalk
• Mail instructions are here.

Orange County:

The Orange County spokesperson says there may be some properties not caught by its software and urges the public to report them. Here’s the form

Riverside County:

Here’s the Riverside County form

San Bernardino County:

Here’s the San Bernardino County form

San Diego County:

Here’s the San Diego County form

Santa Barbara County:

Here’s the Santa Barbara County form

Ignoring the racist language in property documents, some say, reinforces the legacy of segregation, while taking steps to remove restrictive covenant language is a way individuals and organizations can repudiate policies that sought to discriminate.