The Los Angeles Unified School District may not be able to afford the spending promised in its new contract with unionized teachers, according to a letter from a budget oversight agency.
The Los Angeles County Board of Education, which oversees the districts budget, has reviewed the new agreement and says it will lead to the district becoming insolvent over the next few years.
Insolvency means LAUSD could be taken over by the state of California which would be allowed to cut staff and faculty in order to balance its budget.
The district has been given until March 13 to detail a plan of how it will either cut expenditures or raise money in order to remain solvent.
The board was expected to approve the UTLA agreement Tuesday afternoon.
As part of the deal with the union they will also consider a motion to ask the state for a moratorium on new non-union charter schools which UTLA sees as a drain on school funding.
Thousands of pro-charter protesters showed up outside the LAUSD headquarters demanding a no vote on the moratorium.
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Many say the proposal is the result of the "mis-information" spread against charters by the UTLA leadership during the strike.
Charters are public schools run by non-profits and most are non-union. There is no seniority system and teachers can receive merit pay. Twenty percent of LAUSD students are in charters, which are 88 percent minority.
Fifty thousand students are on waiting lists.
The LAUSD board takes up the matter Tuesday afternoon.
