District’s Truce With Union Ends : Education: Labor leader says a projected financial surplus should be given to teachers. Superintendent says budget forecast is too tentative to rely on.

Signaling the return of labor friction in the Los Angeles Unified School District, teachers union President Helen Bernstein demanded Tuesday that any surplus public school funds left over at the end of the year be given back to teachers whose salaries have been deeply cut.

Her statements came one day after an early district review of finances showed a projected $39-million budget surplus by June, a figure that Supt. Sid Thompson said is tentative and based only on spending patterns for the first four months of the year.

Bernstein, however, said “it is outrageous that the . . . district is apparently out of touch with its own true budget picture” and announced that the union is hiring its own auditors to review finances “to hold the district financially accountable.”

Thompson strongly objected to this characterization, saying that the report is “very preliminary and not something to go hanging your hat on and start giving money back. If I were stupid enough to do that, and we bankrupt at the end of the year, someone would have to question my sanity.”

The first interim report is legally mandated by the state to ensure that school districts do not operate in the red at the end of the fiscal year. The first report showed that the district’s $3.9-billion budget may end the year with a $117-million surplus, including $78 million in restricted funds that can only be used for textbooks, school supplies and in emergencies.

The remaining $39 million is made up almost entirely of savings from a new lower-cost health plan imposed on employees last year, money that Bernstein said should be returned to employees.

The teachers’ contract states that if district revenues increase by the end of the year, school officials “must immediately commence negotiations” to determine how much money will be returned to teachers.

Thompson said Tuesday that if, in fact, any surplus materializes in June “we guarantee we are going to be talking to our bargaining units in an attempt to mitigate what has happened to them.”

All district employees were dealt a stinging pay cut last year, including teachers who agreed to an unprecedented 10% reduction. The negotiations over the contract propelled the district into a deep labor crisis for nearly six months, with leaders often mired in fiery rhetoric.

Bernstein criticized school officials for not doing a better job explaining the tentative nature of the financial report to demoralized teachers.

“They cut all our salaries and then tell us there is going to be a surplus,” Bernstein said. “You can’t ask us to reform the schools, put in all this extra work and not do the right thing by their employees.”

The exchange Tuesday between the union and the district is the first skirmish between the district and teachers union in months. Some critics have said the summer cease-fire between the two was in large part due to politics--a united front was needed to defeat the school voucher initiative on the November ballot.

For months, union and district leaders have been saying that they must resolve to work together to reform public education in Los Angeles.

Thompson said Tuesday that he does not believe this financial issue is the opening salvo of renewed tensions.

“I still don’t believe this signals a war,” Thompson said. “If they look at the report and review what we said, these figures are projections. We are willing to talk about it all at the end of the year.”