LAUSD is going to borrow $500 million in bonds, without a vote of the people, to help payoff $900 million in sexual assault lawsuits. In total, LAUSD has $2-3 billion in lawsuits that have to be settled. Where does the money come from to pay off bonds the voters never approved?
“Board members approved the expenditure on June 3 without comment, agreeing to borrow up to $500 million through judgment obligation bonds with an estimated 6.10% interest rate, documents show. Unlike bonds for school construction, they did not require voter approval. The debt is due to be paid off in 15 years. The claims are not covered by insurance carriers.
This fiscal year, the district’s undisclosed number of settlement claims was roughly $302 million, Vaughan said.”
They never even discussed it among themselves! This is massive corruption—and the mainstream media has not reported on any of this!
LAUSD agrees to fund $900 million to settle sexual assault lawsuits
Thomas Peele And Mallika Seshadri, EdSource, 6/16/25 https://edsource.org/2025/lausd-agrees-to-pay-900-million-to-settle-sexual-assault-lawsuits/734608
The Los Angeles Unified school board did not discuss the bonds for settling sexual assault lawsuits before members authorized them on June 3.
Credit: Livestream recordings of LAUSD board meetings
The story was updated on June 16 to include the estimated cost of finance charges and interest on the bonds.
Top Takeaways
- School trustees authorize bonds without comment or public explanation.
- Lawmakers were warned of the financial impact of erasing the statute of limitations.
- Other districts also face massive costs in response to a 2019 state law.
The Los Angeles Unified School District board has quietly approved borrowing nearly $900 million — including interest — to settle decades-old sexual assault cases involving former students.
And that will likely not be enough to settle all the claims the nation’s second-largest school district is facing under 2019 legislation that allows victims of abuse by school employees to seek damages for incidents dating back to the 1970s. District spokesperson Britt Vaughan would not say how many claims the district faces, the number that have been settled and what they have cost to date.
Board members approved the expenditure on June 3 without comment, agreeing to borrow up to $500 million through judgment obligation bonds with an estimated 6.10% interest rate, documents show. Unlike bonds for school construction, they did not require voter approval. The debt is due to be paid off in 15 years. The claims are not covered by insurance carriers.
This fiscal year, the district’s undisclosed number of settlement claims was roughly $302 million, Vaughan said.
“The board has been talking about judgment obligation bonds for, I would say, about a year and a half,” board member Tanya Ortiz Franklin said in an interview. Spreading out the payments means “the district’s current students aren’t punished by depleting resources,” she said.
No public hearings were held. Board members were briefed about the matter in small groups, she said. “We also had several conversations in closed sessions, as we typically do with legal cases.” She did not disclose the number of claims made against the district or how many were settled.
The district administration will likely ask the board to approve more borrowing next year to settle additional claims, Ortiz Franklin said.
The district is far from alone in facing massive payouts to victims who have filed claims under the legislation, Assembly Bill 218, which experts say is impacting local public agencies throughout the state.
Los Angeles County alone is facing $4 billion in settlements involving formerly incarcerated juveniles and foster youth.
By taking on long-term debt to deal with the AB 218 cases, LAUSD is “lessening any potential impacts to (its) core education programs in the near term,” by spreading out the settlement costs, supporting documents provided to board members stated. Nonetheless, the cost of paying down $500 million in bonds – with finance charges and interest of roughly $400,000 million – will reduce spending on students from the district’s general fund by tens of millions of dollars annually for the 15 years after the bond is issued.
AB 218, brought by then-Assemblymember Lorena Gonzalez, rolled back the statute of limitations for abuse claims involving public employees like teachers to “22 years from the date the plaintiff” becomes an adult “or within 5 years of the date the plaintiff discovers or reasonably should have discovered that the psychological injury or illness occurring after” reaching adulthood was caused by sexual assault. Gov. Gavin Newsom signed the bill on Oct. 13, 2019.
Messages left at Gonzalez’s office were not returned.
Legislative records show that proponents of AB 218 argued that sexual assault scandals involving the Catholic Church and the Boy Scouts showed that victims of child sexual abuse sometimes took years to come forward, often after the statute of limitations to seek damages had expired.
“Victims who are ready to come forward today deserve an opportunity to expose their perpetrators and those who covered up the abuse,” members of the Washington, D.C.-based nonprofit Victim Policy Institute told lawmakers, records show.
Opponents of the bill, including the California Association of School Business Officials and other groups, expressed concerns about cost.
“It will be impossible for employers to effectively defend against these claims when evidence is likely gone, witnesses have moved or passed away, and there has been a turnover of staff,” a summary of opponents’ concerns in legislative archives stated. “With these barriers, schools will be unable to adequately respond to these claims. This failure will result in diversion of funding intended to educate students and serve communities to financing increased legal costs, whether or not the claim is valid.”
A Senate staff analysis warned of “unknown, potentially major out-year costs to local entities and school districts to the extent litigation is successfully brought outside the current statute of limitations and/or the entities are liable for damages.” The bill was unanimously passed by both the Senate and the Assembly.
Last week, in an interview, an advocate for taxpayers was critical of the debts the legislation created for school districts and other agencies.
“These bonds are going to hang around the necks of school districts for decades,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “There has to be a statute of limitations,” he said. “Witnesses are probably gone. All cases have to be time-barred at some point. This is bad policy.”
School districts across the state are facing similar claims allowed by AB 218 and facing crises of how to pay for settlements, according to a January report by the state Fiscal Crisis and Management Assistance Team, or FCMAT. As the matter evolves, there is no firm number of the number of claims so far brought against districts, “but the best estimate is $2 billion to $3 billion.”
“A comprehensive analysis of claims is not available,” the report states. “But what we can conclude is that the impact is significant.”
FCMAT concluded that “the goal should be to completely eliminate childhood sexual assault in public schools” and to “increase mandated training to build awareness of, and reporting options for, childhood sexual assault.”
Other recommendations, such as creating a victim compensation fund to eliminate claims brought against individual public agencies, have received little support in the Legislature and were opposed by plaintiffs’ attorneys, the FCMAT’s chief executive officer, Michael Fine, said in an interview.
The claims and settlements, Fine said, continue to pile up. “The data changes daily.”
School Boards have found a way to raise money without having to go to the voting public for approval. Once they have the money, they can spend it any way they want except for construction or facility repair!