If the resolution had passed, a student would have been elected by peers to serve as a voice on the school board. Students haven't had a representative on the board since the 1980s, officials said.
In August, Superintendent John Deasy is expected to bring back a new measure that will meet state education code to have a student representative on the board.
Hundreds of current LAUSD students rallied outside district headquarters on Tuesday afternoon, hoping to sway the decision in their favor.
"Who knows better what happens to the students in the classroom than the students," student Ramiro Pena said. "Teachers can speak for us, but they don't know how we feel."
At the same meeting, Deasy unveiled his $6.8 billion budget proposal, which places emphasis on funding schools based on need, such as those with higher populations of students who live in poverty, are in foster care or are second-language learners.
"It's not just an even distribution across the system, it's a concentration," Deasy said. "When we meet the obligation of the concentration, we move to other schools."
On Monday, former students spent the night camping out on the sidewalk near 4th Street and Beaudry Avenue in order to ensure they'd have seats for the LAUSD school board meeting that began Tuesday around 10 a.m.
A protest also took place outside the LAUSD's headquarters in advance of the meeting Tuesday morning. The area was closed off to traffic, and dozens of empty desks were placed outside as part of a silent demonstration. The desks represent the number of students who drop out of LAUSD schools each week.
The groups Students for Education Reform (SFER) and Communities for Los Angeles Student Success (CLASS) want to make sure the LAUSD spends new state funds to help underserved students.
"Students do matter, sometimes when adults are talking to each other, the real issue gets lost - the real issue is that we are losing students," said Ryan Smith of CLASS.
Gov. Jerry Brown created the Local Control Funding Formula last year, and that gives the district more flexibility on how that money can be spent.
"Now, the board decides how that money is spent. Although, they've made some strides to ensure that those dollars go to those students, not enough money is going to those students," said Smith.
SFER and CLASS want $1 billion from the fund to go to the schools with the highest concentrations of low-income students, foster youth, and English learners.
A final vote on the budget is expected in June.