Paterson Delays Payment of $2 Billion to Schools

March 31, 2010

More than $2 billion in state aid payments to public school districts across the state are being delayed , possibly until June, because of the state’s worsening financial crisis, Gov. David A. Paterson said Tuesday.

The governor’s order, coming the day before the aid was to go out, left school districts scrambling, with talk of program cuts, delayed payments to vendors and possible layoffs if the expected state aid — approved a year ago in the 2009 budget — does not come soon.

Several school officials lashed out at the Paterson administration for giving just 24 hours’ notice and shifting the state’s cash-flow problems onto local districts. A top labor leader predicted some schools — especially lower-income districts that rely heavily on state aid — will have to cancel school days if they can’t pay the bills.

The delay will cost the Buffalo school district $26 million it was expecting Tuesday.

The Paterson administration also sent word Tuesday to construction companies doing business with the state that road and other capital work will be delayed in the weeks ahead until a new state budget deal is reached at the Capitol.