EdVANTAGE Blog

Yesterday afternoon, rumors were circulating that Governor Paterson and legislative leaders would announce agreement on a state budget deficit reduction plan.

But late in the day, the Governor announced that the Legislators were not willing to cut nearly enough, that he was ending negotiations, and would act on his own to cut spending.  This seemed to surprise Legislators who appear to have thought there was agreement on a budget-cutting plan.

The Governor said he would use authority he has under existing law to withhold some local assistance payments.  These would include some of the scheduled December 15 School Aid payments.

The Governor’s legal authority to withhold School Aid payments and some other payments is at least debatable.

Language in this year’s state budget provides that no money from an appropriation may be spent until the Governor’s Budget Director issues a “certificate of approval.”  The Governor intends to order the Budget Director to withhold some local aid payments by issuing certificates that would release only a reduced level of funding.

Then, when he issues his proposed budget for next year, the Governor would include legislation to enact into law his reduced aid payments.

Governors have routinely used this authority to cut state agency spending for supplies, equipment, travel, and even personnel.

But as I explained to the Buffalo News, School Aid is different because it is paid according formulas and payment schedules that are prescribed in state law:

…Robert N. Lowry Jr., deputy director of the New York State Council of School Superintendents, said state law also requires certain payments to schools on specific dates. That, then, creates a conflict that could open Paterson’s plan to legal challenge.

Lowry said the Paterson plan to delays payments is really a backdoor way of cutting school funding in the middle of the fiscal year. “We have to be concerned about the magnitude of the cuts and when amounts for individual districts will be known,” he said. “This creates more uncertainty.”

To my knowledge, previous Governors have not sought to unilaterally withhold School Aid payments prescribed by state law.

In the same article, New York State United Teachers President Richard Iannuzzi raises the threat of a lawsuit to block the Governor’s action.  Presumably school districts or other local entities directly harmed would need to bring such a suit.

Last week, the Governor proposed a revised Deficit Reduction Plan which would have reduced the immediate School Aid cut from $686 million to $295 million and accelerated the use of $391 million in federal stimulus aid to reduce state support for School Aid by that amount.

Reportedly the anticipated budget agreement would have included only the stimulus spin-up, and avoided immediate cuts in aid to schools.

There are reports now that the Senate and Assembly may move to pass the plan they thought was being agreed upon.  The earliest a vote could come would be Friday.