Education Funding News in Brief

Governor of New York Says State Out of Cash

By The Associated Press — December 15, 2009 1 min read

Gov. David Paterson said last week that New York state has run out of cash and he’s directing budget officials to reduce state aid payments to schools, local governments, and nonprofit service providers until the financial picture improves.

Speaking at the Museum of American Finance in Manhattan, Mr. Paterson said he’ll probably get sued, but he won’t let the state run out of money on his watch.

“I am directing the Division of the Budget to limit payments so that we will have the cash to pay our debts at the end of December,” Mr. Paterson said. “I will continue to withhold payments until this economy is leveled off.”

“Now, New York has run out of cash,” he said. “You can’t spend money that you don’t have.”

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.

Other state funds can be tapped to help close that gap, Mr. Megna said, but even using all $1.2 billion of rainy-day reserves and delaying a pension fund payment will leave the margin “razor thin.”

Rather than risking some setback that would force hasty cuts, Mr. Megna said the administration is cutting spending in an orderly fashion. The budget division plans to detail temporary cuts this week, he said.

In his executive budget proposal next year, Mr. Paterson could propose making them permanent.

“We’ve had a revenue collapse over the last 24- to 36-month period,” Mr. Megna said. “The state’s cash position is at its weakest point in recent history.”

Last week, after lawmakers agreed to cuts of about $2.8 billion, the governor said they wouldn’t be enough. He warned then of reduced and delayed payments, targeting school aid and funding to hospitals.

Timothy Kremer, the executive director of the New York State School Boards Association, said it has asked its roughly 700 members to assess the impact of approximately $300 million in school aid is delayed or permanently cut, which Mr. Paterson had proposed last month. Lawmakers rejected the cut, which would have been roughly 1.5 percent reduction across the board.

A version of this article appeared in the December 16, 2009 edition of Education Week as Governor of New York Says State Out of Cash

Events

School & District Management Live Event EdWeek Leadership Symposium
Education Week's Premier Leadership Event for K12 School & District Leaders.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
A Holistic Approach to Social-Emotional Learning
Register to learn about the components and benefits of holistically implemented SEL.
Content provided by Committee for Children
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
How Principals Can Support Student Well-Being During COVID
Join this webinar for tips on how to support and prioritize student health and well-being during COVID.
Content provided by Unruly Studios

EdWeek Top School Jobs

Marketing Coordinator
Portland, OR, US
Northwest Evaluation Association
Sr Project Manager, Marketing (Temporary)
Portland, OR, US
Northwest Evaluation Association
Head of School
Conshohocken, Pennsylvania
AIM Academy
Head of School
Conshohocken, Pennsylvania
AIM Academy

Read Next

Education Funding Opinion What's It Take for Philanthropy to Help Rural Schools?
Place-based philanthropy has enormous potential to revitalize rural communities. The trick is, it’s tough to get this sort of approach right.
4 min read
Image shows a multi-tailed arrow hitting the bullseye of a target.
DigitalVision Vectors/Getty
Education Funding Summer School, Extended Learning a Priority in $129 Billion COVID-19 Relief Bill
The reconciliation bill from House Democrats is an early attempt at what's shaping up to be a new federal aid package for education.
5 min read
A staff member holds the door open for kids on the first day of school at Goodwin Frazier Elementary School in New Braunfels, Texas on Tuesday, Aug. 25, 2020.
A staff member holds the door open for kids on the first day of school at Goodwin Frazier Elementary School in New Braunfels, Texas on Tuesday, Aug. 25, 2020.
Mikala Compton/Herald-Zeitung via AP
Education Funding Details of Biden's Education Relief Pitch Prioritize Smaller Classes, Avoiding Layoffs
The administration's breakdown of COVID-19 needs also includes $50 billion for social distancing and $29 billion for learning recovery.
5 min read
Image of the White House seal
Bet Noire/Getty
Education Funding Lawmakers Push $75 Billion for Learning Recovery Among Trio of COVID-19 Bills
The legislation, which also covers school infrastructure and education jobs, could become the vehicle for Biden's K-12 relief plan.
6 min read
Rep. Bobby Scott, D-Va., speaks during a news conference in Washington on June 24, 2020.
Rep. Bobby Scott, D-Va., speaks during a news conference in Washington on June 24, 2020.
Manuel Balce Ceneta/AP