A new quarrel has opened up between Governor Paterson and state senate Democrats. They say his plan to unilaterally cut payments to schools and local governments this month is unconstitutional. Karen DeWitt reports.

REPORTER: Governor Paterson has wasted no opportunity to condemn the legislature's budget-balancing package approved this week, saying it does not go far enough and that he will have to unilaterally cut payments due to schools, local governments and others when those funds become due later in December.

But now Senate Democrats say that would be unconstitutional. Senator Eric Schneiderman says the Court of Appeals has ruled in a previous case that the governor cannot impound funds on his own.

SCHNEIDERMAN: I think the law is very clear on this.

REPORTER: Paterson says he doesn't care what the legislature thinks.

PATERSON: I'm gonna do it even without their permission. Now if they want to take me to court, they can sue me.

REPORTER: Senator Schneiderman stopped short of saying that the Senate would initiate legal action, but says the legislature may join in if the school or local government goes to court. In Albany I'm Karen DeWitt.