New York City Schools Chancellor Cathie Black defended a new directive that reduces how much money schools can roll over from this school year into next year.
Black said that with looming state and city budget cuts, she wants schools to return 50 percent of all money they don't spend this year.
"It seems to me that it's prudent to say we're not taking 100 percent of it away," Black said. "We're letting them plan ahead with 50 percent of it. We don't have any money. These are very tough times."
Bloomberg, who announced his budget plan Thursday, is set to reduce the teacher workforce by more than 6,000 and could make more cuts if the state doesn't come through with more aid.
Black said the pay-back policy isn't intended to punish principals who have been financially responsible by putting money into rainy-day funds.
Last year, the Department of Education backed off a similar plan that would have forced schools to put all the money they didn't spend back into the city's general fund.