LOS ANGELES — Los Angeles school officials warned this week of impending staff reductions — including likely layoffs — as they grapple with steadily falling enrollment and a three-year budget projection that ends with a deficit.

The budget uncertainty is exacerbated by ongoing Trump administration moves that threaten California school funding over culture war issues — including parental notification related to a student's gender identity and transgender athlete policies — under court review.

Also of concern is Gov. Gavin Newsom's proposal to withhold $5.6 billion that would otherwise go toward K-12 public schools and community colleges. Newsom's move is a cautionary hedge against a future economic downturn. Education advocates have threatened legal action over the proposal.

The nation's second-largest school district is also facing pressure from rising costs and promised employee raises.

"It is not a foregone conclusion that people will lose jobs," Supt. Alberto Carvalho told the school board on Tuesday. In most cases, the job cuts "are about reducing or eliminating positions, not necessarily people. We're not sure if [layoffs] can be avoided in full, but I'm here to tell you that staff is working around the clock to minimize any and all impact."

He added: "Our highest priority will be to continue to protect classroom stability, core services and our workforce members to the greatest extent possible."

Los Angeles is not alone. The district is among about two-thirds of California public school systems working through cuts to programs and staff for next year, said Kevin Gordon, president of Capitol Advisors Group, an education lobbying firm that presented financial forecasts to the Board of Education on Tuesday.

"One of the things that we know that's going on is stress all across the board," Gordon said. There's huge fiscal instability in school districts all across the state."

Few specifics offered

For the current year, the district is operating on an $18.8-billion budget; when it was adopted, Carvalho warned there were likely to be job reductions in subsequent years. Officials project a deficit of $191 million — even with the anticipated job cuts — for the 2027-28 school year, although these projections are affected by unknown factors.

For next year, L.A. Unified hopes to cut $150 million from the central office. Cuts also are likely in other areas, including at schools. Vacant positions outside the classroom may not be filled. Teachers may have to change schools because of falling enrollment.

If a position is eliminated, an employee may be able to bump to a lower-paid position that is vacant or may end up forcing out an employee with less seniority. And there is the likelihood of some layoffs, but no number was released. School closures were not proposed for next year.

Even with the job cuts, officials said the district will need to find additional solutions to balance its projected budget for three years from now. School systems in California are required to plan their budgets three years out.

The specific cuts and how they would unfold will become more clear when officials release a more detailed budget plan within the next few weeks.

Unions cry foul

Union leaders, currently in contract talks, challenge the gloomy outlook and are calling for total compensation that would be more expensive than what is being offered.

United Teachers Los Angeles, with a 150-member bargaining team, had its first session on Tuesday with L.A. Unified and a state-appointed mediator. The two sides met again Wednesday. The mediation was scheduled after the two sides officially reached impasse, a legal stage of negotiations that means both sides are no longer able to make progress toward a deal.

Negotiations also are ongoing with Local 99 of Service Employees International Union, the largest union for non-teaching employees.

Both unions represent more than 30,000 employees.

L.A. Unified calculates that the current compensation offers would cost an additional $800 million.

District officials have offered the teachers union a 2.5% raise in year one of a new contract and 2% in year two, according to the union.

Any cuts are unlikely to reach the deep levels of the 2008 recession — at least not for next year.

Gordon noted there are also positive budget indicators. Revenue is pouring into state coffers as a result of taxes on the state's wealthier residents, especially related to growth in the value of artificial intelligence stocks.

The state's Legislative Analyst's Office has acknowledged this influx but warns of a stock bubble that may burst. Newsom is less cautious in his outlook. Still, he's holding back $5.6 billion that would go to education if he strictly followed state law that requires about 40% of the budget to be set aside for K-12 school districts and community colleges.

Layoffs even with record funding?

Earlier this month, Newsom announced that funding for education had reached its highest level ever, although this increase was a result of state law rather than his actions.

Newsom's discretion resides in proposing how to spend this money. He allotted ongoing funding, for example, to pay for community schools, which offer various nonacademic services to students and their families. Much of the funding also would be distributed through one-time grants.

It's hard for L.A. Unified to pencil in exact amounts for grants even though the district is likely to get its share.

And it's risky to pay for ongoing salaries with one-time grants. For such costs, school systems prefer to rely on the state's annual cost-of-living adjustment.

Gordon and other experts, however, have noted that this automatic inflation factor is not indexed to actual school district costs and does not keep pace with them. In boom years, the Legislature can make up for this shortfall by adding in more money — and that may happen this year.

But for now, this year's inflation factor, based on Newsom's proposed January budget, is 2.41%.

Declining enrollment

When education funds are sent to school districts, the size of the payments is based on the number of students, how often they show up for class and their special needs. There are additional resources, for example, to educate students who are learning English and students with disabilities. Both the federal and state government provide assistance based on family poverty.

Enrollment in L.A. Unified is declining faster than in the state as a whole, and this year, the decline outpaced projections.

L.A. Unified enrollment has declined 43% since 2004, compared with 8% in the state as a whole. L.A. Unified, the state's largest school system, has nearly 390,000 students.

The current projection is a loss of 20,000 students over the next two years. State policies have spared school districts from the full immediate impact of a funding loss tied to decreasing enrollment. The decline is factored into dollar reductions over a three-year period, but the cuts will arrive eventually.

Factors contributing to the decline include lower birth rates, the high cost of living and reduced immigration.

Students defined as newcomers numbered 17,359 this year. Two years ago that number was 21,997.

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