LAUSD misused millions in taxpayer-approved money meant for arts education, suit alleges

Los Angeles Unified officials repeatedly violated Proposition 28 — a state law requiring the hiring of arts teachers — misusing millions in state funds and denying promised arts instruction to students across the school system, according to allegations in a lawsuit filed Monday.

The L.A. Superior Court suit was brought by former L.A. schools Supt. Austin Beutner, who is a plaintiff, along with eight students, represented by their guardians. Three school district labor unions on Monday announced their endorsement of the litigation.

Monday evening, an L.A. Unified spokesperson said the district had not been served with the suit.

“That said, we have sought to clarify any misunderstandings regarding Prop. 28 and we continue to follow implementation guidance as provided by the state of California to ensure that we are fully complying with the requirements of Prop. 28,” the district said in a statement.

In earlier public comments, district officials have said they have properly used Proposition 28 money plus other funding sources to increase overall arts-related spending by more than the amount required by the voter-approved measure.

The lawsuit alleges that L.A. Unified provided a false certification to the state that Proposition 28 arts funding has been used properly, and that “ LAUSD has defrauded the State of California and its taxpayers.”

Proposition 28 was approved by a nearly two-thirds majority of voters in November 2022. It requires that a portion of California’s general fund, equal to 1% of the minimum state funding levels for K-12 schools and community colleges, be added to education funding to expand visual and performing arts instruction.

This translated to $938 million statewide last year and about $77 million for L.A. Unified.

From the get-go, Beutner, who wrote and financed the proposition, was concerned that some school systems would use the new arts money to pay for existing arts programs — leaving students no better off than before. For that reason, the law forbids maintaining the old funding levels with the new money.

Moreover, Proposition 28 states that the arts funding, which is generated by student enrollment, must go to the school in which those students are enrolled. Also, school leadership, such as the principal or a school committee, control the use of the dollars.

“LAUSD has done exactly what the law prohibits,” the lawsuit alleges. “It has eliminated existing funding sources for existing art teachers, and replaced those funds with Proposition 28 funds, thereby violating the requirement that the funds supplement rather than supplant existing sources.”

The lawsuit lists 37 elementary schools with the same or reduced money for arts instruction from 2022-23 to 2023-24 and alleges that most L.A. Unified schools faced a similar funding situation.

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“Presented with a historic opportunity” for a “meaningful expansion” of arts education, “LAUSD has squandered the opportunity and violated the law. As a consequence, hundreds of thousands of students have been harmed,” according to the lawsuit.

L.A. Unified explains its use of Prop. 28 funds

In June, district officials quietly added $30 million to the elementary school arts budget for the 2024-25 school year amid ongoing accusations from Beutner, union leaders and parents scattered across L.A. Unified that the district was violating the law. They had become concerned when, despite the flow of new dollars, nothing appeared to have changed at their elementary schools during the 2023-24 school year, the first year that Prop. 28 funds became available.

Supt. Alberto Carvalho and Deputy Supt. Pedro Salcido said during a June school board meeting that adding $30 million to elementary arts funding for the current school year was not an admission of wrongdoing.

“We decided, considering the degree of confusion and because ultimately we believe in the benefit of arts education ... to create this additional fund,” Carvalho said during the meeting. “Notwithstanding the letter of the law, we decided to lean on the intent, not just the letter, but the intent. How are people perceiving that? And we’re paying a price for that. So ... $30 million is above and beyond full compliance with the letter of the law, leaning more towards what we believe is the understanding of individuals in schools.”

Salcido added: “We want to make sure that as we move forward this is not a place of contention, controversy or questioning.”

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In interviews, on social media and in public meetings, critics continued to fault the district — for not restoring redirected funds from the prior school year. They also contend the added arts instruction for the current school year remains well short of what was required by Prop. 28, an allegation also made in the lawsuit.

The district has refused for more than a year to publicly release relevant budget documents to parents and to The Times that would clarify how the money intended for arts instruction was handled.

Board member Scott Schmerelson — who has since become board president — aired some of the concerns at public meetings. Carvalho partly addressed them in an Aug. 15 internal memo.

In that memo, which was cited in the lawsuit, L.A. Unified officials acknowledged to the Board of Education that they had used new arts money, for example, to replace existing funding for 167 out of 227 elementary arts instructors during the 2023-24 school year.

Meanwhile, money that had been used for arts was redirected for other purposes, which were not described in the memo.

“Given historic staffing challenges in filling Arts educator roles ... the District prioritized the use of Prop. 28 funds to cover existing staff as well as hire new staff,” the memo stated.

District officials said in the memo that their actions were legal because overall district spending on the arts increased in an amount surpassing what was provided by Prop. 28.

In response to questions from The Times, the state education department agreed with L.A. Unified on this point — that to determine compliance with Prop. 28 rules, district arts spending is measured at the district level and not the school level.

LAUSD All District High School Honor Band marches in the 136th Rose Parade.

(Ringo Chiu / For The Times)

L.A. Unified supported their claim of overall increased arts expenditures, in large part citing higher spending for field trips funded through a different source.

With this different funding source added in, the district states in the memo that arts staffing increased from 273 to 520 full-time equivalent positions from 2022-23 to 2023-24 and that arts-related spending increased from $74.7 million to $206.2 million over that same period.

These figures are challenging to assess because of internal inconsistencies and incomplete information.

As one example, the August memo said there were five high school arts teachers in 2022-23. The following year, the number grew to 126 thanks to Prop. 28 and other funding, the memo said. The school system has 86 senior high schools.

However, in written responses to questions from The Times, the district said there were 918 high school arts teachers in 2022-23, not five.

To further justify the Prop. 28 funding shifts, a district spokesperson, in written responses to queries from The Times, stated that L.A. Unified relied on an auditing guide from the California Department of Education, which allowed for districtwide tabulation of arts spending.

The lawsuit contends that the auditing instructions do not outweigh all other factors. “This does not give defendants the right to violate every other portion of the statute’s plain-language requirements,” the suit alleges.

State won’t investigate

State education officials, including state Supt. of Public Instruction Tony Thurmond, have avoided taking sides in the dispute. A senior department official has advised districts to consult their own attorneys as needed.

Even so, “it is unlikely that the use of arts funding for field trips unrelated to the arts would be an appropriate use of funds,” said department spokesperson Elizabeth Sanders.

Sanders added: “We don’t know one way or another if LAUSD is operating within the audit guidelines when it comes to their use of Prop. 28 funds.”

John Marshall Senior High School students perform at a district event at Walt Disney Concert Hall in 2019.

(Al Seib / Los Angeles Times)

The field trips have been organized under a program called Cultural Arts Passport, or CAP. Field trips were apparently tabulated as arts spending, including trips to amusement parks, professional sporting events, game shows, the zoo, recreation areas and activities such as indoor sky diving, according to the lawsuit and internal L.A. Unified records.

These CAP field trips are paid for from a different state-funding source, the state-funded Expanded Learning Opportunities Program, the school district has confirmed to The Times.

“Defendant Carvalho has repeatedly used CAP to attempt a cover-up: by incorrectly including funding for CAP in its calculations of how much funding was spent on arts education,” the lawsuit alleges.

At a June meeting, Chief Academic Officer Frances Baez defended the classification of all field trips as arts instruction, saying, in part, that “Arts lives everywhere.”

Proposition 28 states that 80% of funding must pay for the salaries and benefits of either new arts teachers or arts teachers working additional hours. The remaining 20% is to pay for costs related to this instruction.

Field trips could fall under that 20% — although that 20% also should cover such needs as art supplies, musical instruments and arts teacher training, state officials and other experts told The Times.

A lot of money, jobs at stake

The unions endorsing the litigation are United Teachers Los Angeles, Local 99 of Service Employees International Union, which represents most non-teaching workers, and Teamsters Local 572, which represents drivers, plant managers, cafeteria managers and some other workers. UTLA or Local 99 would represent the vast majority of the new arts instructors that would be hired.

UTLA President Cecily Myart-Cruz emphasized the benefits of arts education and the importance of honoring the intent of the law.

“I am frustrated and exasperated by this kind of shell game that we’re playing with voters’ money, and we’re also playing with students, our babies, in this district, that deserve to have arts education on a daily basis in their schools,” Myart-Cruz said.

Highland Park parent Vicky Martinez, a plaintiff in the suit, said she actively campaigned for Prop. 28 but became frustrated when she saw no discernible increase in arts education at the schools her three children attend — and no satisfactory answers from questions raised by her and other parents.

When she had attended public school, “I had the honor of having art. I was able to take dance,” Martinez said. The arts made school engaging and “I knew that if I wanted to continue to do these things, I had to be in school, and I had to do good in school.”

“So when my kids went to the same school I attended, I thought, if I had it, surely they have to have it. And lo and behold, that wasn’t the case,” Martinez said. “So after we passed Prop. 28, I was really surprised that we weren’t seeing an improvement in the arts across the board. It’s very important to me, and it’s very important to the kids in my community.”