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Schools get a reprieve, thanks to stimulus Federal funds not only negate proposed state cut, but provide an increase

What was shaping up as a disastrous fiscal year for local schools is quickly turning rosy.

That's all because of the federal economic-stimulus package.

School districts in New York State will receive $1.25 billion in the next school year from that fund, which is a centerpiece of President Obama's fiscal recovery plan.

That not only makes up for Gov. David A. Paterson's proposed $700 million cut in state aid to schools, but leaves $550 million as, in effect, a funding increase.

As a result, most school systems should be able to largely avoid layoffs, program cuts and large property tax increases that seemed inevitable just a few weeks ago, said David Albert, a spokesman for the New York State School Boards Association.

In addition, the stimulus package will provide school districts in Erie and Niagara counties an additional $43.8 million in special-education funds and $35.7 million to spend on economically disadvantaged pupils.

"This is a lifesaver for school districts," Albert said.

But even the stimulus package will not prevent cuts by the Buffalo Public Schools, which currently face a 2009-10 budget gap of $52 million. The federal funds will reduce that gap by at least $16 million -- and probably more -- but are not expected to cover the entire shortfall, said Gary M. Crosby, the school system's chief financial and operating officer.

The stimulus funds will not only rescue classroom programs that might have been cut, but will help the local economy, said Terry Ann Carbone, superintendent of the Lockport city schools.

"If we had to sustain huge cuts, that translates into people being laid off," she said. "The stimulus package will help maintain jobs."

While the overall picture is bright, the lack of details has school officials marking time.

The State Legislature will decide how to the distribute the $1.25 billion, and until it does, individual school systems will not know how much they are receiving or whether spending guidelines will be included.

"It's subject to negotiations with the Legislature as part of the overall budget process," said Matt Anderson, a spokesman for the state Budget Division.

So while the funding scenario has changed dramatically, school districts are in the same position they're in every spring: waiting for the governor and the Legislature to agree on a spending plan that's supposed to be -- but rarely is -- in place by the start of the fiscal year, April 1.

Meanwhile, suburban school officials are preparing budgets that go before district voters May 19.

"It's frustrating," said Jeffrey R. Petrus, assistant superintendent for business in the Orchard Park Central School District. "There's a good chance we may not know before we have to adopt a budget how much stimulus money we're going to get."

The stimulus legislation covers 1,100 pages, and rules and regulations are still being drawn up by the federal Department of Education, Albert said.

"We welcome the funding," he said. "But we are putting together budgets now. We just need to know when we are going to receive it."

The Williamsville Central School District hopes to use the stimulus funds to reduce taxes but is waiting for details.

"There are a lot of questions," said Thomas R. Maturski, assistant superintendent for finance and management services. "We need some additional information on the particulars before I really know how this will affect our budget."

There is also widespread concern that the stimulus package covers two years and then expires.

As a result, school officials are wary of adding staff and programs that they won't be able to afford when the stimulus funding ends.

"It won't do a whole heck of a lot of good to establish something and then have to cut it," Crosby said.

The hope is that the state's financial picture brightens in the next two years and that Albany will again be able to boost school funding.

Albert said school systems should use the two-year reprieve to find cost-cutting measures such as health insurance consortiums or other shared services.

"Now is the time," he said, "to think about innovations and efficiencies."

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