Is NYSUT going ahead with its lawsuit against Gov. David Paterson for withholding school aid payments? This question was raised in the Daily Politics blog by Liz Benjamin (here). The union's lawyers requested the court to delay the hearing of their own lawsuit, even though the basis for it included the claim that the Governor's action caused an "immediate and severe" impact on school districts.

Requesting a delay in the hearing of your case may mean the impact of the Governor's withholding may not be so "immediate and severe" after all. The school aid amount of the Governor's payment delay amounted to $146 million, of which $69 million was for New York City. Keep in mind that school districts outside the Big 5 cities get a huge chunk of their annual revenue by October 1st when its property tax levies are due. So, a delay of up to $70 million spread across the 685 or so school districts doesn't add up to much, especially when most of their property tax revenue is earning interest in the bank.

This doesn't mean, of course, that the Governor was right in withholding state aid to localities and districts, as The Chalkboard has written previously. I believed the better approach would have been to for the state to borrow on a short-term basis to deal with its cash flow. Now, I can respect the Governor's unwillingness to take that borrowing route since such action opens up a potentially ominous Pandora's box, reminiscent of the mid-1970s when New York City was issuing bonds to pay for operating costs. No doubt the Paterson administration would rather take the hit on delaying payments instead of borrowing. Fair enough.

Payment Delay is Not Refusal
NYSUT and the School Boards Association are understandably frustrated that the executive branch's withholding of funds came after the legislature (the Senate, in particular) rejected mid-year cuts in school aid. However, delaying payments is different from impounding them; that is, Gov. Paterson has said the funds will be spent when sufficient cash materializes, so he's not refusing to spend it forever. This makes court intervention a more murky endeavor since it is not uncommon for the state government to sit on invoices and delay payments.

NYSUT Executive Vice President Alan Lubin told Daily Politics that his organization would not drop its lawsuit until they were given assurances by the Governor that the money owed to school districts will be paid. No doubt that is being discussed even now.

The bottom line is that school districts have a right to this money, and that the Governor should want to avoid a court ordering him to cut the checks. The executive branch has considerable state constitutional powers for managing the state's finances, but courts also have been willing to intervene. It's in every one's interest to settle this issue rapidly by paying the school districts and making the litigation go away. I expect with next month's state revenue the matter will become moot before the release of the Governor's Executive Budget three weeks from now in mid-January. That proposal will have plenty of doleful news without this litigation hanging around.

Peter Murphy
for The Chalkboard