LA Unified Trustees to Float $500 Million in Borrowing to Pay Abuse Settlements

LAUSD faced an impossible choice: How do you make survivors of decades-old abuse whole while protecting today’s students from bearing the financial burden, keep UTLA happy?

When Justice Comes with a Price Tag

The Board of Trustees of the Los Angeles Unified School District recently approved up to $500 million in bonds to settle approximately 370 sexual abuse claims, some reaching back to the 1940s. These cases, brought forward under 2019’s Assembly Bill 218, represent real people—former students whose childhoods were stolen and whose voices were silenced for decades.

The district deserves credit for finally confronting this dark chapter. However, the financial mechanism chosen—judgment obligation bonds that pull money directly from operating budgets over 15 years—raises troubling questions about who ultimately pays the price. Unlike traditional school bonds requiring voter approval, these bonds bypass public consent, a decision that sidesteps democratic oversight and leaves taxpayers funding decades-old liabilities without a say. This lack of transparency and voter input is a troubling precedent, undermining trust in a board that should prioritize public accountability.

At an estimated 6.1% interest rate, taxpayers will pay roughly $765 million, or $51 million yearly. That money won’t go toward reducing class sizes, updating textbooks, or fixing leaky roofs. This fiscal year alone, LAUSD has already spent $302 million settling claims, using short-term loans now converted to these long-term bonds.

The Debt Trap Dilemma

School bonds typically fund lasting improvements—new buildings, upgraded technology, and infrastructure that serve students for decades. Using them to pay for legal settlements essentially asks future students to finance past failures.

Board member Tanya Ortiz Franklin argues this approach avoids “impossible decisions” about cutting current programs. However, it may simply postpone those cuts while adding interest costs that compound the problem. With over 275 claims still pending, more borrowing likely lies ahead. A key driver here is the United Teachers of Los Angeles (UTLA), which spends heavily to elect board members sympathetic to union interests. Using existing funds for settlements would cut into payroll, threatening the 21% teacher raise granted in 2023. This bond strategy shields union benefits, prioritizing adult employment over student needs—a choice that demands scrutiny.

Consider what $51 million annually could buy: roughly 850 teachers, counselors for every middle school, or arts programs in hundreds of schools. Instead, it will service debt for wrongs committed before most current students were born.

The Bigger Picture

This bond decision didn’t happen in a vacuum. LAUSD faces a projected $1.3 billion deficit by 2028, despite receiving nearly $26,900 per student, well above the national average. While enrollment has dropped by 164,000 students since 2012, the district added 17,000 non-teaching positions.

These numbers tell a story of institutional priorities. When budgets tighten, the first question should be: What serves students best? Too often, the answer seems to favor adult payrolls, influenced by UTLA’s political clout, over direct student services, leaving families questioning where loyalty lies.

Transparency Matters

Perhaps most concerning was how quietly this major financial decision was made—the $500 million authorization passed on June 3 without public discussion. Details only emerged after media pressure, and a six-month-old public records request for information about claims since 2000 remains unfulfilled.

Parents and taxpayers funding these bonds deserve to understand what they’re paying for. Secrecy breeds suspicion and erodes the trust LAUSD desperately needs to rebuild.

A Path Forward

LAUSD faced genuinely difficult circumstances—legal obligations to abuse survivors and fiscal constraints that made immediate payment challenging—but other options existed.

The district could have used more reserve funds, negotiated longer payment schedules with plaintiffs, or sought targeted state assistance. Instead, it chose the path that pushes costs into the future while adding interest expenses, likely influenced by UTLA’s push to preserve funds for raises.

Looking ahead, LAUSD has created its own insurance company to handle future claims—a step that, if managed properly, could provide better financial predictability. But it’s another complex financial arrangement that requires careful oversight.

The Human Cost

Behind every budget line item are real people. Abuse survivors deserve justice and compensation—their suffering cannot be measured in dollars, and society must make amends where possible.

But today’s students also deserve consideration. LAUSD’s chronic absenteeism rate hit 32% in 2023-24, and test scores continue lagging. These children need resources and attention and hope their education system can deliver on its promises.

Every dollar spent on bond payments is not available for counselors, smaller classes, and enrichment programs that could help struggling students succeed. This is a painful reminder that yesterday’s failures create today’s limitations.

What Comes Next

LAUSD’s bond decision reflects the complex reality of public institutions carrying decades of accumulated problems. There are no perfect solutions, only choices between imperfect alternatives.

The district needs greater transparency about its finances, clearer priorities that prioritize student outcomes, and the courage to make difficult decisions about what it can and cannot afford—especially when influenced by union agendas.

Parents, taxpayers, and community members deserve a school system that learns from its mistakes rather than simply borrowing against the future to pay for them. That means honest conversations about priorities, rigorous spending oversight, and accountability for results.

The children in LAUSD classrooms today didn’t create these problems, but they’re the ones who will live with the consequences. They deserve better than a system that repeatedly chooses the path of least resistance while passing the bill to tomorrow.