The Los Angeles Unified School District (L.A. Unified) has announced plans to issue up to $500 million in bonds to finance past alleged sexual misconduct claims against the district. This decision is part of a broader trend affecting various institutions across California, facing similar allegations dating back decades.
The action follows a mounting number of sexual abuse claims, with L.A. Unified specifically contending with approximately 370 reported cases, as disclosed on Monday.
Approved during a school-board meeting on June 3, the bond issuance allows the district to extend repayments over 15 years, helping to lessen the immediate financial impact on its budget and services.
Initial sales will total $303.6 million, needed to pay off lower-cost, short-term loans that had been utilized for previous settlements, which have already consumed $302 million this fiscal year.
Though Superintendent Alberto Carvalho holds the authority to issue bonds up to the full $500 million, district officials indicated that the eventual need may exceed that amount.
The bonds being issued are classified as judgment obligation bonds, which differ from traditional school-construction bonds. Notably, these bonds do not require voter approval. While conventional school bonds are financed through increased property taxes, judgment obligation bonds will be repaid from the district’s regular budget.
In a separate initiative, the school district has set up its own insurance company to better manage future abuse claims.
This financial maneuvering is triggered in part by Assembly Bill 218, which was passed in 2019, allowing adults to file lawsuits for childhood sexual abuse dating back to the 1940s. The law created a three-year window for claims to be filed, which concluded at the end of 2022, and further extended the deadline for filing claims to age 40 or within five years after victims become aware of the harm they suffered.
L.A. Unified, alongside other entities, has been inundated with claims since then, including from those alleging abuse that occurred decades ago.
Since January 1, 2020, about 370 people have stepped forward with claims under the provisions of AB 218. Among them, around 76 claims involve incidents from the 1940s through the 1970s, while 45 to 50 reports of abuse date back to the 1980s.
Despite numerous settlements and dismissals of cases, over 275 claims remain active according to district data.
School board member Tanya Ortiz Franklin discussed the financial implications of the situation, stating that if all claims were to be satisfied in one fiscal year, the district would face challenging decisions that could detrimentally affect current students’ services.
The approved bonds allow for a structured approach to repayments, smoothing out costs over time and limiting immediate financial strain on the district’s annual budget. For context, a lump sum payment of $320 million would represent around 2% of the district’s $18.4 billion budget, a significant expenditure that could draw funds away from education and employee services.
In a statement, the district emphasized the importance of supporting victims while also managing fiscal responsibilities to its current students. The surge in lawsuits, while justified, presents a conundrum for educational institutions reliant on taxpayer funding.
The district believes that justice for survivors is imperative but warns that the consequences of such laws could jeopardize entire school systems, particularly when fighting claims linked to leadership and practices that have changed significantly since those incidents occurred.
The payments involved are substantial even when spread out; should the district use the full $500 million in bonds, it would be responsible for over $51 million annually in principal and interest, leading to financing costs surpassing $768 million, according to L.A. Unified figures.
L.A. Unified is not alone in addressing the financial burdens brought on by AB 218. Earlier this year, the L.A. County Board of Supervisors approved what is believed to be the most extensive sex abuse settlement in U.S. history, a staggering $4 billion allocated to victims of abuse in county-managed juvenile facilities and foster homes.
The county is likewise utilizing bonds and draining its rainy day fund to manage those costs, anticipating long-term repayment obligations over the next 25 years.
Despite minimal transparency from district officials regarding past cases and claims, there is an ongoing push for increased accountability and public discourse around this critical issue. A request for a complete list of sexual misconduct cases filed against L.A. Unified since 2000 is still pending following a request made six months ago.
Moreover, earlier discussions surrounding the bond issuance appeared to occur with limited public oversight. The Board of Education approved spending authority without debate, omitting specific dollar figures from public documents, although earlier drafts had included the $500 million estimate.
Franklin noted the implementation of a self-owned insurance company is a proactive measure to manage liabilities moving forward. While this insurance addresses current risks, it does not cover claims from decades past. Together, the bond issuance and the new insurance structure will help the district manage both short- and long-term liabilities effectively.
Historically, sexual misconduct claims have placed significant financial strain on L.A. Unified. Between 2012 and 2024, the district has faced over $372 million in judgments and settlements, with ongoing challenges related to insurance companies disputing their obligations to cover past misconduct claims.
As L.A. Unified navigates these legal and financial landscapes, the district urges collaboration among lawmakers, advocates, and state leaders to strike a balance between fulfilling moral obligations to victims and preserving the right to quality public education for future generations.
Reform efforts to minimize the chances for such misconduct have led to the establishment of tip lines, revised policies, regular training for employees, and the creation of specialized investigation teams.
As the district moves forward, L.A. Unified remains committed to supporting survivors while also protecting the educational rights of its current students.
image source from：https://www.latimes.com/california/story/2025-06-16/l-a-unified-will-sell-at-least-320-million-in-bonds-to-pay-sexual-misconduct-claims
