LAUSD passes $21B budget plan, spending more money than it has

The Los Angeles Unified School Board approved a nearly $21 billion spending plan Tuesday for the next school year.

LAUSD’s budget includes salary increases for teachers, support staff and administrators but raises questions about how the district will retain those employees with planned cuts in the coming years.

The board voted unanimously to adopt the 2026-27 budget a week after approving a cost-savings plan that will likely result in the elimination of thousands of jobs.

What’s in the budget?

The district’s $20.6 billion budget is divided among different accounts.

The largest, by far, is the $12 billion general fund, which accounts for the majority of salaries and money for day-to-day school operations:

• About 40% of the general fund is considered “restricted” because it’s required to go toward a specific purpose, such as the education of students with disabilities or toward low-income communities.
• The unrestricted portion — about $7.4 billion— includes money for teachers, administrators and other educator salaries, tutoring, transportation and classroom supplies. The vast majority — more than 80%— of this money pays district employees.

There is also about $4 billion in capital projects funds for school construction and renovation projects. Voter-approved bonds generate the money for these projects and it cannot be shifted to pay for salaries or other school needs.

The remainder of the budget is for relatively smaller items like food service, adult education and debt.

A breakdown of LAUSD's 2026-27 budget

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Courtesy LAUSD

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The plan adopted largely matched what was presented last week, with one exception: The board voted to restore $25 million of funding to external afterschool programs. District staff has yet to identify where the majority of that funding will come from.

What challenges are ahead?

The new spending plan is nearly 10% larger than the budget adopted last year and exceeds the amount of revenue the district expects to bring in by $2 billion. The district will, for the third consecutive year, pay the difference with reserves.

“These deficits are only possible to the extent we have reserves,” said Saman Bravo-Karimi, the district’s chief financial officer, during last week’s budget presentation.

The district expects to end the 2026-27 school year with about $1 billion remaining in reserve, but by the 2028-29 school year, staff expect the negative ending balance will grow to $3.6 billion.

This is the second year the district has adopted a “fiscal stabilization plan,” at the request of the Los Angeles County Office of Education. California law gives county education leaders the power to intervene when districts are at risk of not meeting their financial obligations. The fiscal stabilization plan is meant to show what factors are straining the budget and include strategies to reduce spending, increase revenue and temporarily spend reserves or one-time funding.

The elimination of more than 650 jobs in May was one consequence of last year’s plan.

This year’s fiscal stabilization plan proposes cutting $3.5 billion additional dollars over the next three years. It strips $500 million from the district’s signature equity program, the Student Equity Needs Index, which funnels money to schools with greater perceived needs.

The board did restore proposed cuts to the Black Student Achievement Plan.

LAUSD staff have said the fiscal stabilization plan will likely result in thousands of layoffs in the coming years, though job cuts will require further board votes.

The board also ordered that if the district receives additional revenue from the state, that money will be prioritized for the highest-need schools via BSAP and SENI.

Contact your board member