Unlike states, localities are more constrained in their ability to raise revenues. It's creating big budget deficits for some school districts.
BY LIZ FARMER | FEBRUARY 22, 2019 AT 4:00 AM
Teachers in Oakland, Calif., and West Virginia went on strike this week, following strikes earlier this year in Los Angeles and Denver.
The strikes are putting more financial pressure on localities than states because localities are more fiscally constrained when it comes to their ability to raise revenues.
The new labor contract in Los Angeles, for example, widens the structural deficit in the district's operating budget to $1 billion over the next two years, leading to calls to find new ways to raise revenue.
The momentum following last year's teacher strikes has carried into 2019. On Thursday, teachers in Oakland, Calif., went on strike to demand a 12 percent retroactive pay raise. And earlier this week, West Virginia teachers striked for two days over a proposal that would have created the state’s first charter schools and provided funds for private school vouchers.
Both strikes follow ones from earlier this year in Los Angeles and Denver, as well as a teacher walkout in Virginia.
Like last year's strikes, teachers are also winning concessions.Denver educators got an average 11.7 percent pay raise, annual cost-of-living increases and more support staff. In Los Angeles, the six-day strike ended with a deal that includes a 6 percent pay raise, smaller classroom sizes and more on-campus support staff.
But responding to the strikes may be much harder for localities than it is for states. That's because localities -- particularly school districts -- are more fiscally constrained when it comes to their ability to raise revenues. Most localities rely on the property tax, which in many places has caps restricting revenue growth.
That's certainly the case in Los Angeles, which is potentially facing the greatest pressure. A new report from Kroll Bond Rating Agency notes that the new labor contract widens the structural deficit in the Los Angeles Unified School District’s operating budget to $1 billion over the next two years. The increasing shortfalls “pose a significant challenge for the district’s fiscal health and reinforce the need to identify significant cost savings or new revenue sources in order to achieve structural balance,” the agency warned.
Oakland faces similar difficult choices. Already, the Oakland Unified School District is in the middle of cutting $20 million to close a gap in next year's budget and is expected to lay off 112 staff members.
Of course, any strike at the local level is likely to ultimately involve state help. After all, states provide roughly half of school districts’ annual funding.
The day before teachers went on strike in Oakland, school principals met with legislators in Sacramento to lobby for more education funding, noting that the state would have to pay out $1,500 more per student every year to bring California up to the national funding average. Gov. Gavin Newsom has highlighted the need for greater education funding, remarking in his State of the State speech that the state ranks 41st in the nation in per-pupil funding. But he has been light on details. “Something needs to change,” he said. “We need to have an honest conversation about how we fund our schools at a state and local level.”
In Denver, the end of the teacher’s strike marked the beginning of discussions in the statehouse about boosting education funding as a way of heading off any other walkouts in the state. One proposal would increase education funding by as much as $451 million annually; another would change the way property tax revenue is distributed among the school districts.
Teacher strikes are becoming a key tactic for educators across the country, particularly in places where government investment has not kept up with inflation. This week marks the one-year anniversary of what became a groundswell movement started by West Virginia teachers. That strike led to other walkouts in Arizona, Colorado, Kentucky, North Carolina and Oklahoma, with varying degrees of success.
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