SYRACUSE -- School districts, cities, and counties across New York State are dealing with delayed payments. The delay comes as Governor David Paterson does what he says is necessary to keep the state operating and prevent a negative balance of more than $1 billion at the end of the month.
Governor Paterson says he's doing what's vital to keep the state afloat. To deal with the $2.3 billion deficit, he's ordered $750 million in reductions to scheduled payments this month. Essentially, he's delaying payments to make sure the state can keep functioning. "We are actually saving the people of the state of New York from absolute chaos where there's no government at all because no one knows what to do when you run out of money and you still have obligations to pay," said Paterson.
Under the plan, the STAR program will see $436 million less in funding. School aid will see a 10% reduction or $146 million. $76 million will be taken from the allocation for Human Services. State employee fringe benefits will see a 19% reduction by $47 million and the AIM program, or Aid and Incentives to Municipalities, will see a $45 million decrease for now.
The Syracuse City School District says it will be all right for the short term, having anticipated the delay in payments. "If that two million is lost or at some point he says this is the pattern every month, you're going to be two million short, yes that would be a major problem," said Dan Lowengard, Superintendent of Syracuse Schools.
Lowengard is bracing himself, hoping the payment delays don't turn into cuts. The long-term solution, he says, is for the state to redistribute school aid to urban districts and deal with rising pension costs and health care contributions. But for now, the governor is delaying those payments until the state gets back on steady ground.
As money becomes available, Governor Paterson says the state will potentially pay the amounts that were delayed. But if that doesn't happen, he could further delay payments over the remaining months of the fiscal year.
