Teachers, school boards sue Paterson over school aid

December 16, 2009 by JAMES T. MADORE / james.madore@newsday.com

ALBANY - Four education groups sued Wednesday to overturn Gov. David A. Paterson's delay of $582 million in school aid payments and STAR property-tax reimbursements owed to school districts this month.

The lawsuit, filed here in state Supreme Court, alleges Paterson violated the constitution by unilaterally withholding funds approved by the legislature in April and undermining the guarantee of "a sound and basic education" for all children.

Seeking to prevent New York from running out of money on Dec. 31, Paterson postponed $750 million in payments to schools, cities, counties and health insurers to remedy a $1 billion shortfall. Schools received aid payments Tuesday that are 10 percent less than expected and STAR reimbursements will be 19 percent less during the week of Dec. 28.

Officials at the teachers' union, school boards association, superintendents council and school administrators association doubted the withheld money would be paid by March 31, the end of the state's fiscal year.

They predicted teachers would be fired, programs for students cut and property taxes raised as districts cope with the first midyear reduction in aid since 1990. A few upstate school districts have announced layoffs or aren't filling vacancies.

"The governor is overstepping his bounds," said Richard Iannuzzi, president of the New York State United Teachers union, who taught for 34 years in Central Islip. "He clearly lacks any legislative, statutory or constitutional basis to withhold funds . . . and by doing so, he is harming children."

Paterson shot back that his authority stems from a provision included in every budget since 1995. It requires the budget director to first certify that the state treasury has sufficient funds before the comptroller can make payments.

Paterson accused the four groups and allies, such as the New York State Parent Teacher Association, of selfishness in the midst of a deep recession. "This is a desperate attempt by special interests to put their needs above the needs of all of the people," he said.

If schools were fully paid this month, Paterson said, the state would have to defer 67 percent of the money owed to cities, counties and health insurers instead of 10 percent to 19 percent depending on the payment type.

Timothy Kremer, executive director of the New York State School Boards Association, said a 1980 decision by the state's highest court bars the governor from acting without lawmakers' approval. The ruling also says the governor isn't required to keep the budget balanced.

Kremer urged Paterson to borrow money to pay December's bills, while Alan Lubin, executive vice president of the teachers' union, suggested raising the personal income tax again.

Paterson dismissed the ideas, saying the state's debt burden is already too high.

The education groups did not seek a temporary restraining order against Paterson. Kevin Casey of the School Administrators Association said the case was too complicated to make such a request, though the court agreed to expedite proceedings.

Arguments could be heard as early as Jan. 5. Casey said, "We believe the judge will agree with us that the governor cannot withhold payments from schools."