After enduring months of overpayment, underpayment and nonpayment, teachers in Los Angeles Unified School District (LAUSD) have now been given what many union officials believe to be an untenable choice by district representatives — pay what you owe or risk paying taxes on the overpayments.
The school district has imposed a December 10th deadline for employees who have been overpaid to reimburse the district, a figure that district representatives say is approximately $53 million. The teachers union, United Teachers of Los Angeles (UTLA), decries this maneuver as unfair to teachers, and the union leadership is challenging the validity of the estimate.
This latest development in the ongoing payroll crisis at the school district, which has confounded educators, school officials and parents, could further strain the already frayed relations between members of the district’s largest teachers union and members of the district administration.
Teachers say that even though many have received some excess payments, the amount of underpayments to their salaries far outweighs any overpayments. In addition, they do not trust the num- bers that the district has produced.
“The anger level among teachers is growing,” said A.J. Duffy, president of United Teachers of Los Angeles.
“The facts and figures come from the system that has been underpaying teachers,” Duffy pointed out. “And nobody believes in it.”
The payroll controversy has been ongoing since January. A glitch in the computer system that handles payroll has misfired for the better part of a year, leaving many teachers in tight financial straits with the holidays fast approaching and tax time just around the corner.
“Our members are very concerned about their taxes,” saidDuffy, referring to the question of whether the district can produce accurate 2007 W-2 forms next year for teachers. “LAUSD has told us that they may not be able to meet with all UTLA members before the end of the calendar year. Our members are concerned that their payroll issues will be resolved way too late.”
District employees who have been subjected to an unsteady system of payment received letters earlier this month from Joseph Zeronian, the district’s interim chief financial officer, informing them that employees will be responsible for the total amount of the alleged overpayments, including the amount the district withheld for taxes.
Duffy said that the union has negotiated an option where teachers can challenge the district’s findings regarding the overpayment.
“One option will be for teachers to file a 5248 form in lieu of a W-2,” the union president suggested.
Artie Athans, a Westchester tax expert, said that is one route that educators can choose.
“A 5248 form is a substitute W-2 form that teachers can file if they have correct tax records,” she explained. “That’s one way that they could go.”
Jonathan Cook, an English teacher at Venice High School, had trouble with his payroll check in the earlier part of the year but said that things have improved for him somewhat. He realizes that many of his fellow educators face the possibility of problems with taxes due to the under- and overpayments, and the new mandate to pay back excess payments by December 10th exacerbates that concern.
“This puts all the teachers who have had problems with payroll between a rock and a hard place,” he said.
District officials insist that their figures are quite accurate. Teachers and union officers dispute that claim, and they point to the school district’s inability to pay its employees accurately for such a sustained period.
High-level administrators at the district say that most of the problems have been repaired, and they hope to have all of the glitches fixed within a couple of months.
“Ninety-two percent of all of the system defects have been addressed,” David Holmquist, the interim chief operating officer of the school district, told The Argonaut in an earlier interview.
The district continues to use the same software system, despite the problems that educators have been subjected to for most of the year. The district has hired a consultant to help fix the ongoing glitches in the system, which is part of $95-million technology upgrade that was designed to overhaul how budgets and procurement are evaluated.
Athans believes that there are other ways that the district can help to alleviate the potential problems that teachers may incur at tax time for those who have been overpaid.
“I would expect that the school board would set up an accounts receivables fund for the teachers and calculate how much teachers owe,” Athens said. “They could treat the overpayment as a loan, and teachers would only pay taxes on what they have correctly been paid.”
Duffy has signaled that if the financial situation of teachers is not resolved soon, there could be a number of actions that the union would consider — including a possible work stoppage.
“It won’t be hard to convince people to walk out,” he stated. “If the district takes money away from teachers, all hell will break loose.”
If the district does not provide accurate tax information to its employees, “It could become a big problem,” tax expert Athans said. “They need to get it right, sooner rather than later.”
Cook, the Venice High teacher, says that many of his colleagues are disheartened with their current fiscal situation.
“There’s a general sense of exasperation,” he said.
The teacher feels that some progress has been made with the computer system, despite all of the ongoing problems.
“There has been improvement,” Cook conceded, “But a lot of that is because of pressure from [UTLA].”
Union officials are bracing for what looms as a possible showdown on December 10th, which, in Duffy’s opinion, will be one of the most important days of his tenure as the head of the teachers union.
“This is the most serious issue that UTLA has faced in over 40 years,” Duff asserted.
School district officials Holmquist and Zeronian could not be reached for comment at Argonaut press time.