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Paterson to Ask for Delay in School Aid

Friday, May 14, 2010

Gov. David Paterson will ask the legislature to allow him to delay around $1.5 billion dollars due to schools June 1, saying the state does not have enough cash on hand to afford the payment. Paterson’s budget director, Robert Megna, says the governor will send a bill to the legislature for action Monday, asking that the state be allowed to delay until later in June part of the billions of dollars owed to school districts. Megna says it’s an attempt to reassure schools, whose fiscal year ends June 30, that the money is coming. "What we’re telling them is, ‘Look, we may not pay you on June 1 the full amount but you’re going to get paid within the month,’" said Megna. "'So you don’t need to go out and make any rash decisions.'" Megna says New York will have enough money, though, to pay $2 billion that’s been owed to schools since late March, the last time that the state had to delay school payments. Unlike the previous emergency spending bills, which included one day a week furloughs for state workers, Megna says the governor will not force lawmakers to choose between delaying the school aid payments or shutting down government. But the budget director says if the legislature does not act, he would not rule out linking the two measures in the future. “We don’t want to jam the legislature,” said Megna. “But if we reach the point where we have no other option we may have to put it in an emergency bill.” The furlough provision led to a lawsuit, and the state has been prevented from carrying out the furloughs until a judge holds a hearing late in May. The judge also ruled that Paterson could no longer with hold 4 percent raises that were due to state workers April 1 as part of their contract. The governor had delayed the raises, saying New York could not afford them. His budget director says the new emergency spending measure will include the raises, but only for the current pay period, not retroactively to April 1. “We’re in no way trying to get into an inflammatory situation with the courts,” said Megna. Instead of postponing the school aid payments, New York could borrow short term to meet its financial obligations. Paterson, speaking earlier, said he is not interested in any more borrowing. “I do not want to bequeath to the next administration or the people of the state of New York further financial encumbrances,” he said. “The day of reckoning has come for Albany.” The governor could also use his own authority to delay the school payments, as he did at the end of December and at the end of March. But the budget director says they do not want to use that method this time. The governor’s power to withhold payments is currently being challenged in court by the school districts. The state budget is now a month and a half late. The governor and his budget officials say that even if there were to be an agreement soon, the state will still not avert the end of the month cash crunch.

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