Melvoin Calls Union Demands ‘Magical Thinking’

As UTLA prepares to protest at school sites Wednesday, LAUSD Board Vice President Nick Melvoin (BD4) offered up some straight talk on union demands and what’s at stake for our kids.

Speak UP Board WatchUnion negotiations are underway, and the board faces some tough choices if it’s going to keep the district from going bankrupt. Can you talk about the fiscal crisis the district is in and the problem you inherited and were elected to help solve?  

Nick Melvoin: It’s multifaceted because we’ve had poor choices by my predecessor and others. Even though we know our teachers deserve raises, and we want to make sure we’re attracting great employees, the [district has] never budgeted for raises. So when [LAUSD] gave teachers a 10 percent raise over three years a few years ago, they had to figure out where to pull money from. So three years out, the fiscal stabilization plan looks like — oh, class sizes are going to increase by 10, the district is going to take back any money that a school hasn’t spent, all these things that I don’t think parents would support. We also had poor financial choices around iPads and MiSiS and sexual abuse settlements that all have led to a situation where even without raises, if you look three years out…we barely are staying afloat.

BWAnd the district has to have a certain amount in reserves by law.

NM: We have to have a 1 percent reserve, which for our district is about $70 million. But we also are a district that has a couple things going against it. We have declining enrollment, and when you are funding districts based on revenue from enrollment, and we also have declining attendance. So one thing we hope Speak UP and others can help parents know is that every day a kid misses class, the school loses money. If we could increase attendance by one or two percentage points, that’s tens of millions of dollars. The other issue is this unfunded liability when it comes to healthcare. In addition to the compensation we give to teachers, which admittedly is not great in terms of state averages, but when you add benefits, we get near the top. Because we’re the only district in the country that has no cost sharing for employees when it comes to retirees and active employees.

BWThey have lifetime health benefits for them and their dependents with no contribution, right?

NM: It’s called the rule of 85. If your age and years of service add to 85, yes. And because we have an aging workforce, we have a lot of people who have hit that point or are about to hit that point. So we are going to be on the hook for years at a cost of about $10,600 per employee per year, which is about exactly what we get per child [in revenue]. So the district hasn’t been funding this. So now we have this issue where OK, if we’re going to pay our employees what they’ve been promised, how are we going to fund it? When we look at projections – and this is something I forced the board and district to look at as soon as we got into office, which they hadn’t done in years — it looks like in 2031, 50 percent of all of our money will be going to retiree healthcare costs. Click here to read more: