Lawsuit says LAUSD short-changing neediest students

Legal advocates filed a lawsuit Wednesday charging that Los Angeles Unified misused $126 million in state education dollars and funneled it away from the district's neediest students.

The suit, filed Wednesday morning by Public Advocates, ACLU Foundation of Southern California and Covington & Burling LLP in Los Angeles Superior Court, takes the district to task for inappropriately using the funds to pay for special education, services that they say should come out of the district's general fund.

The lawsuit is the first of what could be a broader legal challenge across California examining how school districts use state dollars designated for English-learning, low-income and foster care students.

"This accounting manipulation will shortchange these students over $2 billion over the next decade," said Victor Leung, staff attorney at ACLU Foundation of Southern California.

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In a Los Angeles Unified release, the district said it was disappointed by the suit. "We believe that this group has misinterpreted the Local Control Funding Formula. The Legislature clearly granted school districts — which serve predominantly low-income students, foster youth and English language learners — the highest degree of flexibility in determining student program needs."

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The dollars in dispute come out of a funding pot called local control funding formula or LCFF — a new state system implemented by Gov. Jerry Brown two years ago to shift funding decisions to the local level and help improve learning for high-needs students.

LCFF has dramatically increased education funding across the state, helping to restore school district budgets that saw deep cuts during the recession. 

The legal advocates say LAUSD's special education budget includes LCFF funds that they argue should be used to increase or improve services for the targeted students. Instead, the district is using the new funds to pay for basics, specifically special education, that it is already legally required to cover. 

"They are taking credit for what they were already doing," said David Sapp, director of education advocacy for the ACLU of California. "That reduces the amount of new increased or improved services for the three high-needs student groups that LCFF identifies."

In court documents, the plaintiffs say the district's inappropriate LCFF spending amounts to $126 million for the 2014-2015 school year. They also say the district is on track to short-change the targeted students by $288 million for the 2015-2016 school year. 

Without a re-calculation, the lawsuit says, high-needs students in the district could lose $2 billion in funding over the next decade. 

“LAUSD is breaking its promise to provide my children and millions of other students in the future, with the services they need and the law says they should receive,” said Reyna Frias, a mother of two Los Angeles Unified students who is among the plaintiffs, in a news release. Her children qualify for targeted LCFF funds.

This story has been updated.