LA Unified School District Approves Additional $250 Million in Bonds for Sexual Abuse Claim Settlements

Image: LAUSD seal; via Wikipedia.

LA Times reports that the Los Angeles Unified School District has approved borrowing an additional $250 million to fund settlements tied to sexual abuse claims, adding to $500 million in bonds authorized less than a year ago. District officials estimate that the total cost of both bond issuances, including financing, could exceed $1 billion over time.

The school board unanimously approved the new round of judgment obligation bonds, a financing mechanism that allows public entities to borrow funds specifically to satisfy legal judgments and settlements. Repayment will be made from the district’s general fund over a period expected to span at least a decade, reducing immediate pressure on the operating budget.

Superintendent Alberto Carvalho said the district is nearing the limits of previously approved funds. He explained that many of the claims stem from allegations dating back decades and involve cases the district has determined it cannot successfully defend.

“These multi, multimillion dollar judgments against the district need to be satisfied, and without the judgment obligation bonds, we would have to use general fund as cash to satisfy them,” Carvalho said.

Board members raised questions about the financial impact and whether additional claims may emerge. District officials acknowledged that more cases could move forward and said LAUSD is seeking legislative solutions to address the growing liability burden.

Legal Window Expanded Under State Law

The surge in litigation follows California Assembly Bill 218, enacted in 2019. The law opened a temporary three year lookback window that allowed survivors of childhood sexual abuse to file civil lawsuits regardless of when the alleged abuse occurred. That window closed at the end of 2022.

AB 218 also extended the statute of limitations for childhood sexual abuse claims, permitting survivors to file lawsuits until age 40 or within five years of discovering psychological harm linked to the abuse.

Thousands of claims have been filed statewide against schools, religious institutions, youth organizations, and government agencies. In 2025, Los Angeles County reached a landmark multibillion dollar settlement resolving claims involving abuse in county run juvenile facilities and foster care placements.

Financial Strain Across California School Districts

LAUSD is not alone in confronting escalating settlement costs. Estimates have placed total sexual abuse related liabilities for California school districts in the billions of dollars. Education finance experts warn that large payouts, combined with bond repayment obligations, can affect staffing decisions, facility upgrades, and student services.

Michael H. Fine, chief executive of California’s Fiscal Crisis and Management Assistance Team, said legal liabilities compete with core educational funding priorities.

The cost of the original $500 million bond issuance was previously projected to require annual payments that could approach $50 million. District documents estimate that financing costs tied to the new $250 million bonds could add hundreds of millions of dollars over the life of repayment.

Budget Pressures and Workforce Reductions

Alongside the bond approval, LAUSD recently authorized hundreds of job reductions aimed at stabilizing long term finances. Officials emphasized that the district’s fiscal challenges reflect multiple factors, including declining enrollment and the expiration of pandemic related federal aid.

Still, sexual abuse claim settlements represent a significant and continuing financial obligation.

Calls for Transparency

Public scrutiny has also focused on confidentiality provisions included in past settlement agreements. Prior investigations found that some school districts, including LAUSD, used nondisclosure clauses restricting public discussion of settlement terms.

Advocates argue that transparency is essential to institutional accountability and survivor recognition.