PERSPECTIVE ON L.A. SCHOOLS : Cut the Fat for Financial Fitness : A management overhaul is more fair than cuts across the board and less harmful to the goal of educating our children.

Come June, the Los Angeles Unified School District will be unable to pay its bills unless it cuts $85 million from expenses. And from next year’s budget, the district will have to eliminate another $120 million.

The need for such drastic cuts leaves school board members wondering if the current district structure can survive. The governor and Legislature, facing reduced state revenues, have made severe cuts in school funds; lottery money, once viewed as a panacea for school fiscal problems, cannot save the district from massive changes.

Bottom line: There is no more money. But if these gray clouds lack a silver lining, there is a ray or two of light and hope, if we can shed some traditional mind-sets about the best ways to set up schools for our children.

“Cutting the fat” forces one into the never-never land of deciding, case by case, whose job and staff is essential and whose must be cut. The normal pattern is for district insiders to point out where more is needed, rather than where less will do.

The worst possible scenario, and unfortunately the most likely solution, will be for the school board to decide to “share the pain” by cutting a certain percentage across the board. But the result will just be a district doing a poorer job than it does now of educating children.

In the past, budget cuts have been made in belief that more money would be available in the near future. Janitors have been eliminated, maintenance deferred and budgetary wizardry used to delay the inevitable. Now we know there is not enough money available to hold this crumbling system together.

But here is an opportunity: The school board can seize the moment to decide how a leaner district could work. Like many U.S. corporations that have been forced to restructure in order to survive, the board--to make the very limited dollars available best serve the children of the community--must abolish whole departments and offices that fill the organization chart of the Los Angeles Unified School District.

The remaining dollars must be spent at school sites for the benefit of pupils. Those who understand how best to do this are the individual principals, teachers, parents and school office staffs themselves. With the responsibility for budgeting their own funds, they can make the critical curriculum, staffing and instructional decisions necessary for educating children. And the children, in turn, can live without the studies, the manuals and the bureaucratic requirements sent out from downtown staff.

In a market economy, corporations are forced by competition and economic conditions to restructure so as to increase efficiency. Mercury Marine, a division of Brunswick Corp., eliminated one whole layer of management, cut expenses and increased revenues because of fast decision-making on the scene. Interstate Stores Inc. declared bankruptcy in 1974, re-emerged in 1974 as Toys “R” Us, a highly profitable leader in children’s toy retailing. Such firms found that they really could do more with less--and do it better.

We elect school board members to make these hard decisions for our public-education “corporation.” The board’s job is to prioritize, to decide among competing interests and to put the interests of children first, well above the interests of all the other competing groups, in determining how to spend what money is available.

To accomplish this in the short time necessary, the board must begin to work now with local schools to build individual budgets based on what services are most needed. Major corporations that have made schools their concern now primarily take part in the Adopt-a-School program. Why not ask them for the services of a planner for three months, to work with regional superintendents and local school staffs to implement this necessary concept?

The reality is that we cannot afford the same old school district. If the board does not pursue new directions and new opportunities in these financial hard times, everyone--but especially Los Angeles schoolchildren--will lose out.