Local school officials are waiting to see what the latest proposal by Gov. David Paterson to cut aid payments will mean for them.
Despite the recent passage of deficit-reduction legislation by the Legislature, Paterson said Wednesday that he was directing budget officials to reduce state aid payments to schools, as
well as local governments and nonprofit providers, until things improve.
"Now New York has run out of cash," he said at the Museum of American Finance in Manhattan. "You can't spend money you don't have."
State Budget Director Robert Megna said the state faces a shortfall of more than $1 billion in the general fund at
the end of this month, which would be a first for New York.
The budget division plans to detail temporary cuts this week, Megna said. In his 2010-11 executive budget, Paterson could propose the cuts be made permanent.
At Unadilla Valley Central School, steps are being taken to get through any possible state-aid difficulties, Superintendent Robert Mackey said.
These include bond refinancing and a hiring freeze.
"We are trying to be proactive, not knowing what will happen," he said.
One estimate suggests the delayed payments could total $200,000, he said.
"Everybody is guessing right now," Mackey said. But the district is trying to deal with any issues by taking action now, he said. If the budgeted aid is received, the savings will help with the next budget cycle.
The situation is "frustrating" because there is so little information coming out of Albany, he said.
"We don't know what is going to happen."
The New York State School Boards Association said that the total being withheld could be similar to mid-year cuts proposed by Paterson in October.
The organization's executive director, Timothy Kremer, said about the Wednesday statement, "We think it's inappropriate and likely illegal for him to unilaterally act in that way."
His organization could be one of several to seek a court order to block the step.
At Unatego Central School, business manager Nicholas Rosas said he does not know how much money Paterson is talking about withholding. The district faced a $270,000 mid-year cut in the earlier proposal.
At this time of year, schools usually receive a schedule of payments that they can expect from the state, but nothing has yet been provided, he said.
"There is an awful lot up in the air," he said.
If it amounts to a brief delay in receiving aid payments, the district can probably get by, he said.
If not, it might have to consider by January, borrowing for the first time in nine years, to meet daily demands.
Right now, "there just is not any information out there," he said.
With school taxes recently collected, the Oneonta City School District should be able to get through this period of uncertainty, said business manager Lisa Weeks. Paterson's mid-year cut for Oneonta called for $532,000.
The district has made preparations to deal with a delay of payments until April 1.
This includes not replacing retiring staff, cutting costs and monitoring cash flow, she said.
If state aid resumes as expected, the changes will help the district deal with, at best, no aid increase next year, because of state budget problems, she said.
