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Schools fear never getting delayed state aid<br> Governor's statement leads officials to wonder if funding will be reduced or eliminated.

The state's delay in paying $2.1 billion in school aid was not the thing that was most worrisome to local school officials on Wednesday.

What concerned them far more was the gnawing fear that the state's financial crisis is so severe that the money will never be paid, or that the already-budgeted amounts will be substantially reduced.

Those fears were fueled by not only the magnitude of the state's budget crisis but also Gov. David A. Paterson's statement that the money will be paid by June 1 "assuming sufficient cash is available." Schools had been scheduled to receive the aid Wednesday.

There is precedent for the loss of anticipated aid from Albany.

A state bailout of New York City's Metropolitan Transportation Authority last year was supposed to be followed by increased funding to repair upstate roads and bridges. But the upstate aid never materialized.

Already, the likelihood of deep state aid cuts for next school year has school districts planning layoffs, program cuts and property tax hikes to close their budget gaps.

Now, as a result of the state aid delay, school officials fear that elimination or reduction of that money also will cause severe fiscal problems at the end of this school year.

"We would be extremely concerned if we don't receive the money by June 1," said Mark P. Mondanaro, superintendent of the Kenmore-Town of Tonawanda School District, which is slated for a delay in state aid of $6.1 million. "Does anything shock us anymore? No."

On Tuesday, Paterson said he would delay $2.1 billion in school aid to conserve cash as the state faces a deficit of more than $9 billion for the fiscal year that begins April 1.

Several local officials said they could handle the delay through the use of reserve funds, short-term borrowing or a favorable cash flow. Loss of investment income or payment of interest on the loans could be significant but not monumental.

But reduction or elimination of the state aid would be a heavy blow.

"That's always in the back of your mind," said David Albert, a spokesman for the New York State School Boards Association.

Paterson's plan would delay payment of $26.4 million to Buffalo, the largest amount in the region.

"We can survive that right now because our cash flow is good," said Superintendent James A. Williams. "I'm assuming [payment] will happen in June."

Like several other school officials, Williams criticized Paterson for delaying the funds with no advance notice. "Everything comes as a surprise, at the last moment," he said.

Officials in the Cheektowaga-Sloan School District say they anticipate receiving $1.38 million in delayed aid but concede they have little control over the ultimate outcome.

"I'm going to hope these are intelligent and wise people who don't [withhold aid from] the children of our district," said Kevin Ziemba, Cheektowaga-Sloan's director of finance and administrative services. "We just don't have the resources to cover those kind of losses."

At an event Wednesday in the Bronx, Paterson defended the delay in school payments. "We do not have the resources," Paterson said of declining revenues that are driving the state's deficit to a projected $9.2 billion for the 2010-11 fiscal year starting today.

"Right now, our financial situation is so vulnerable that we have to consider everything in order to keep the state from becoming bankrupt," he said.

The governor and lawmakers officially missed the deadline Wednesday for an on-time budget for the new fiscal year. The Legislature is on an 11-day break for the Easter and Passover holidays, and is not set to return until April 7.

Recent history gives school officials reason for hope that they will see the promised aid.

In December Paterson delayed $582 million in scheduled state aid payments to the state's nearly 700 school districts and later paid them as promised.

"The fact that extraordinary cash-management actions such as these are necessary underscores the dire nature of our state's fiscal circumstances," Paterson said.

In Williamsville, a delay in the receipt of $2.7 million in school aid could cost roughly $100,000 in lost investment income, said Thomas R. Maturksi, assistant superintendent for finance. "We certainly have to take direction from New York State, the governor and the Legislature," he said. "We just hope everything comes through."

Tom Precious of The News Albany Bureau contributed to this report.


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