School board member Ref Rodriguez's Eastside district — one-seventh of the Los Angeles Unified School District — is a sprawling, crescent-shaped piece of land that manages to include Katy Perry's home in Los Feliz and the notoriously poor and corrupt cities of Vernon, Bell and Cudahy. Rodriguez maintains a satellite office in the far-flung outpost of South Gate, across the street from a Bimbo factory, in an empty school.
This was once Tweedy Elementary, a peach-colored building and a collection of shabby bungalows set atop a black field of asphalt. When the school district built a new Tweedy Elementary a few blocks away, in 2004, the older campus was converted into an adult learning center. Rodriguez's office is inside one of the bungalows, which also includes a room full of unused textbooks.
Today, LAUSD finds itself in a curious position: cash-poor and land-rich. It owns 750 properties, making up more than 6,600 acres of land, or more than 10 square miles — an area larger than the city of Santa Monica. But many of its schools are under-enrolled.
"There are places where we have schools that are basically four blocks away from each other — and at a time, that made sense," Rodriguez says. Now, he says, "Buildings built for 1,000 kids may have something like 400.
Between 1980 and 2000, LAUSD's population exploded from about 500,000 to more than 700,000, causing classrooms to become seriously overcrowded. Elected officials responded to the crisis by moving schools to a year-round schedule, by busing students to less crowded schools, and by hiring hundreds of teachers and throwing up hundreds of cheap, prefab bungalows on playgrounds.
Then, in the 1990s and 2000s, voters passed a series of bond measures to fund the construction of more than 100 new schools. Some, like the $578 million Robert Kennedy School, built on the site of the Ambassador Hotel, became among the most expensive public schools in the country.
"We had overcrowding, we were busing kids — some of them were on the bus for a couple of hours," says LAUSD superintendent Michelle King, who's been with the school district since 1978. "At that point, we really wanted to ensure every child could attend their neighborhood school. No one could have foreseen, I think, that the landscape would change."
A little more than a decade ago, something unexpected happened. The district's enrollment, which peaked in 2004 at just under 750,000, began to drop. Some of the loss was to independent charters, a growing trend that would soon amount to a veritable exodus of students. But the total number of kids being served by both the district and charters also was dropping. The reason was simple: People are having fewer children. They're also having them later in life — and they're often leaving L.A. once they do.
This is no small problem. School districts in California receive money from the state based on a formula that depends, in part, on how many kids attend their schools. Fewer students means less money.
Today, LAUSD's enrollment is around 514,000, a number that the district estimates will fall below half a million by 2018. But L.A. Unified's costs have not gone down. They've gone up. This year's $7.59 billion budget is half a billion dollars more than last year's.
The nation's second largest school district is facing a looming fiscal crisis, one that could have devastating consequences for the city.
"Everyone just hopes they can keep the ship afloat for a while and something will happen to change the vectors," says former state treasurer Bill Lockyer. "I don't see that happening. But it's easy to decide that when the alternative is making some hard and unpopular decisions."
In his 2015 campaign, Rodriguez, a former charter school operator, spoke about the need for the district to shrink — or, as he put it, to "contract elegantly." Like any company faced with fewer customers, it needed to downsize but in a way that didn't actually make its "product" worse.
"We're trying to stay away from the biggest impact to kids in classrooms," he says. "But I do believe that we need to talk about school closures at some point. It's inevitable. And we need to talk about it in a way that's truthful."
The declining birthrate in the United States is a sort of political sleeping giant. Dr. Dowell Myers, a USC professor who studies demographic change, describes the issue like this: In Los Angeles County, the ratio of people over 65 to people between the ages of 25 to 64 — the ratio of retirees to workers — is likely to double between now and 2030.
"That's never happened before, ever, in the United States," he says. "This rising ratio is the central political driver for the next 20 years. The facts of life are this ratio. It's everywhere in the country, in every state."
This demographic shift could have devastating consequences for public institutions such as Social Security and health care. But the first victim might be public education. A school district like Los Angeles Unified relies on a steady supply of young people for its revenue, and it pays for its retired workers' benefits. It's easy to see how one decreasing and the other increasing could be a problem.
As of now, there are a number of reasons why people are having fewer kids. Contraception is more widely available than ever before — which is believed to be the cause of the decline in teen pregnancies. (A 2014 Brookings Institution study found that two MTV reality shows, 16 and Pregnant and Teen Mom, may be responsible for up to a third of that decline.)
What's more, just as it has become harder for Americans to maintain a middle-class lifestyle — wages have largely stagnated while the price of buying a home has skyrocketed — it has become more expensive for middle-class Americans to raise children. Childcare has gotten more expensive, as has health care.
"The irony is that urban centers are becoming much better places to raise kids," says Richard Florida, a professor at the University of Toronto and author of the forthcoming book The New Urban Crisis. "In general, big cities have much lower crime rates than they once did. But the combination of expense factor and poor quality of schools means many people still move out to the suburbs to raise children."
Los Angeles County is experiencing the demographic tilt away from children at a more accelerated rate than most of the country. The fertility rate here is down among all ethnic groups, and the number of minors (those under the age of 18) in L.A. County has been steadily falling since its peak in 2001, when there were nearly 2.7 million. In 2015, according to the L.A. County Department of Public Health, there were just under 2.3 million.
Additionally, more people are moving out of Los Angeles County than are moving in, though the total population continues to tick up due to the relatively low number of deaths (there were about 56,000 deaths in 2015, and an additional 56,000 or so lost to net migration, compared with 135,000 births).
In other words, L.A. is getting older, much like the rest of the country. But L.A. is getting older more quickly. That may be because of the region's high housing prices and relatively low wages.
"Our housing prices are a new barrier to young people settling here," Myers says. "So they go elsewhere to buy houses when they reach 35."
This shift, the graying of L.A., will have myriad implications.
Social Security, for example, is paid for by workers. So is Medicare. So are public employee pension funds. The cost of all of these benefits is increasing, which will leave both workers and state and local governments with less money.
Cities are going to need more senior housing, more supportive housing, more health care workers, more caretakers.
"The question of an aging population is one of the most pressing questions in urban economics today," says Lyman Stone, an agricultural economist who studies demography and migration. "Some people think the effect will be positive — we'll consume fewer resources, we'll use robots to fill in for the lost population. I think that outcome is not the most likely outcome. I think the more likely outcome of a declining population is diminished opportunity, diminished dynamism and entrenched inequality.
"I know that sounds pessimistic."
In 2015, interim LAUSD superintendent Ramon Cortines signed a new contract with the teachers union, handing its members a 10 percent pay hike, their first raise in eight years. In response to criticism that the deal was fiscally irresponsible, Cortines convened a committee to study the district's long-term budget outlook.
The panel's report painted a grim picture and included this dire warning:
"If the District desires to continue as a going concern beyond [fiscal year] 2019-20, capable of improving the lives of students and their families, then a combination of difficult, substantial and immediate decisions will be required. Failure to do so could lead to the insolvency of the LAUSD, and the loss of local governance authority that comes from state takeover."
Peter Taylor, former chief financial officer for the University of California, was one of the nine members of that panel. He says he was flabbergasted at some of the group's findings.
"One of the most disturbing things was, as they've lost 150,000 students, they have not adjusted the size of their workforce," he says. "In fact, they've increased the size of their workforce. They're adding staff. That is completely unsustainable. I realize schools are not a business. But you can't keep adding costs when revenue is declining."
Today, the district has more than 60,000 employees, fewer than half of whom are teachers. School board members were shocked to hear, in a report by the superintendent in May 2016, that LAUSD's administrative staff had grown 22 percent over the previous five years. Over that same period of time, the number of teachers had dropped by 9 percent, mostly due to attrition.
For many, that is the exact opposite of how you shrink the district.
"To have so many people working at the district that are not teaching, I think, is the biggest problem," says Steve Barr, the founder of Green Dot, a chain of charter schools. "It wouldn't be so criminal if they were kick-ass at supporting teachers."
But Lisa Alva, a teacher who's running for school board, says the bumper crop of administrators has not shown up anywhere near the classrooms: "I have not seen it at the school-site level. I don't think anyone has."
Among other things, the panel suggested that for every 100,000 kids the district lost, it needed to cut 10,000 staff — administrators, teachers, janitors, everyone — in order to save $500 million. But the cost of employee salaries has been growing — this year, it's more than $4 billion. And the cost of benefits (including workers' compensation, pensions and health care benefits for both employees and retirees) also is going up — currently, it's $1.92 billion.
LAUSD superintendent King says the district will shed employees, but the goal is to decentralize the school district — to add positions on school sites and lose positions at LAUSD's hulking downtown headquarters on Beaudry Avenue.
The cost to the district of paying for its retired employees' pensions, is expected to balloon over the next few years, by hundreds of millions of dollars. The school board has long seen this problem coming but has been slow to act on it.
"We saw the trend lines," says Yolie Flores, who was on the school board from 2007 to 2011 (she's now running for Congress). "I remember financial advisers telling us we're going to be at a cliff. I can't tell you how many times we tried to address those issues, but we never had a majority of board members that were willing to do anything."
Many of her colleagues, she says, "were retired administrators, where if you changed the benefits, it would have affected them personally."
Another reason for the inaction, according to "school reformers," was the presence of both the teachers union and service workers union, the SEIU Local 99. Both spend prodigiously on school board races, wield enormous influence over the district and have secured bountiful benefits for their members. For instance, LAUSD employees make zero contributions to their health insurance.
"Health care costs are dramatically higher than other school districts," says Taylor, who notes that management of the employees' health care plan is run by an independent, nine-member committee — eight of whom are union members. "They have no accountability to the board."
The panel found numerous ways to save money, including reducing the number of workers' compensation claims, increasing student attendance and offering early retirement to some of the older teachers who are making the highest salaries. These suggestions, along with others, were delivered to the school board in late 2015, about a week before Cortines was set to step down as superintendent.
"I don't believe they were met with great enthusiasm," Taylor says. "And I don't know that anything's been done about them since."
King insists the panel's recommendations have not been ignored, though none of the major ones have been implemented. "We have teams here really digging deep to give us recommendations on efficiency," she says. "We've been very proactive."
In December, LAUSD chief financial officer Megan Reilly presented an even bleaker picture of the district's financial outlook: a cumulative $1.5 billion shortfall by the start of the 2018-19 school year. Six weeks later, she announced she was stepping down, after more than a decade on the job.
Before that announcement, superintendent Michelle King had ordered each department to come up with a plan to eliminate 30 percent of its budget. Those cuts have yet to be approved, but the district is already using them to lower its predicted deficit, down to around $220 million in the 2018-19 school year.
"It was an exercise for each division to really examine what we do and to see how they are serving the school sites," King says. She points out that the budget is balanced for the next two years, and adds, "I would define us as being ahead of the curve."
But even those theoretical cuts don't solve the district's "structural deficit" — the fact that its revenue is declining and its costs are growing.
The responses to this impending crisis vary. Some have tried to pin the blame on charter schools, which effectively siphon money away from the school district. More than 100,000 students — about one in six of all LAUSD students — attend independent charter schools, a number that accounts for nearly half of the district's loss of enrollment.
"Too often, the response of the district has been to blame charter schools, as opposed to looking inward, improve their own schools, be better fiscal stewards," says Nick Melvoin, a school board candidate who's running against board president Steve Zimmer (Zimmer declined to comment for this story).
Others say instead of cutting, the district should be looking for ways to bring in more money.
"L.A. Unified is always the victim," says former board member David Tokofsky, now a consultant for the administrators union. "They just sit around and say, 'Oh my God.' They're not stepping up to find revenue."
The district could, for example, ask voters to raise property taxes to supplement its general fund. But the last time LAUSD tried that, in 2010, the modest, $100-a-year parcel tax was handily rejected by voters, 47 to 53 percent (it needed a two-thirds majority to pass).
"Right now, no one wants to give money to a general fund because they don't think it will be spent well," Melvoin says. "My hope is that with better fiscal management, with radical transparency, then we can be honest about our balance sheets, we can go to voters. But at this point they don't want to throw good money after bad, and I don't blame them."
Closing schools is highly unpopular. But the land-rich district has leased some of its property to affordable-housing developers, to build subsidized workforce housing for some of LAUSD's lower-income employees (the housing was originally conceived of for teachers, but teachers, it turns out, make too much money to qualify). This was done not to bring in revenue but to help workers. But LAUSD could decide to turn over some of its land for market-rate housing.
Which brings us back to Tweedy Elementary — the old Tweedy Elementary, now a mostly empty lot by day (save for Ref Rodriguez's South Gate office) and an adult learning center by night. That adult education could easily be moved to the campus of a district school, since it takes place in the evening.
LAUSD could sell that and other land, a move some would call shortsighted, though it would lower maintenance costs and give the district cash it could then use to invest in classrooms — something that just about everyone wants to do.
"You could lease some of that land and make investments," Tokofsky says. "Necessity could be the mother of invention."
If you like this story, consider signing up for our email newsletters.
SHOW ME HOW
You have successfully signed up for your selected newsletter(s) - please keep an eye on your mailbox, we're movin' in!
It's become part of the conventional wisdom that one of the reasons Los Angeles has fewer kids is that its school district is seen as subpar. Parents disenchanted with LAUSD have a number of options — they can send their kids to a charter school, they can move to a nearby school district such as Culver City or Santa Monica, or they can move out of the county. It would appear that parents are availing themselves of all of those options.
"The vast majority of people in the city say, 'Yeah, LAUSD is a joke,'" Barr says. "They're like the Knicks."
"The district itself, it has such a bad reputation that we do have to figure out how to get around that," says Rodriguez, speaking from his office on the former campus of Tweedy Elementary. "In the meantime, there are things that can close. Like this place."
Correction: David Tokofsky’s second quote has been amended from an earlier version, which had him suggesting that LAUSD could sell some of its land. He says he did not say that.