Paterson plan hits poorer school districts harder

December 14, 2009 by JOHN HILDEBRAND / john.hildebrand@newsday.com

Long Island's poorer school districts will get hit far harder than rich ones this week under Gov. David A. Paterson's plan to withhold $16.4 million in the region's school aid.

Postponed payments represent about 10 percent of the $164.8 million originally intended for Island schools this week. That's roughly the same withholding rate that Paterson is applying to the state as a whole, as part of his plans to close a state budget deficit.

Figures from the State Comptroller's Office late Monday afternoon do not include state STAR property-tax rebates, part of which will be withheld later this month. Those December payments are nearly triple the size of the regular state aid payments.

Withholding aid from all districts at a uniform rate has its biggest impact in poor districts, because that is where state-aid formulas drive the greatest portion of money.

Thus, Brentwood's loss of $1.5 million in aid this week is 0.5 percent of its budget. Far wealthier Jericho will lose $36,137, or only 0.03 percent of its budget.

"This flies in the face of the state's efforts to equalize opportunities using state money," said William Johnson, superintendent of Rockville Centre schools and a former president of the New York State Council of School Superintendents.

Some aid-dependent districts were taking the potential losses in stride, however. Paterson has not said when the money withheld will finally be distributed, but a state teachers union has promised a legal challenge against the governor's authority to delay payments.

One district that might seem particularly vulnerable is Wyandanch, where $228,093, or 0.4 percent of its budget would be withheld. Unlike most districts, Wyandanch has no reserve "rainy-day" funds to compensate, because it is struggling to plug a budget deficit left by a previous administration.

But Calvin Wilson, the district's finance director, said Wyandanch anticipated withholding of aid earlier this year, and borrowed enough money to cover temporary losses. Wilson added that the extra borrowing over six months would cost Wyandanch about $1,800 in interest charges - an expense already included in this year's budget.

"We're disappointed that the state is delaying payment, but we factored that into our borrowing need earlier this year," said Wilson, who added that withholding should create no major problems for his district, unless it lasted more than 35 or 40 days.

"If this goes beyond mid-January, then we would be in the market for unanticipated borrowing, with costs that would be spent on interest rather than on students," he said.