The governor’s budget director said Wednesday it’s “premature” for some school districts to have laid off workers, and said New York will wait until after the November election to decide whether to slash state spending.
Budget director Robert Mujica told The Associated Press that the state has withheld $300 million in education funding — a fraction of $26.4 billion in total school funding. Mujica said the state won’t be withholding school aid due at September’s end, despite concerns from some school leaders.
Gov. Andrew Cuomo has threatened a 20 percent permanent across-the-board cut to schools, hospitals and local governments if Congress doesn’t pass additional federal aid that could replace state revenues lost amid the COVID-19 pandemic.
Cuomo’s administration hasn’t released 20 percent of state payments to local governments for months — amounting to roughly $2 billion through July.
But schools and hospitals have been spared so far. And Cuomo says the money could be released if federal aid arrives.
Still, school districts in the Capital region, including Albany and Schenectady, have already laid off dozens of teachers and employees over fear of a potential 20% cut that could hurt low-income communities the hardest.
“A lot of districts are relying very heavily on their fund balance and reserve funds,” Brian Fessler, governmental relations director for the school boards’ statewide association, said. “That’s not a really sustainable solution for them.”
In April, Cuomo said President Donald Trump agreed during their White House meeting to “work very hard” to pass extra state funding.
But months later, it’s unclear how much, if any, extra federal aid will help New York reverse $8 billion in potential spending cuts through March alone. And Cuomo is demanding tens of billions in additional funding for the state’s transit systems and budget shortfalls in years to come.
Mujica said the state will have “better clarity” in November, once voters decide whether to re-elect President Donald Trump.
“The Senate and the White House have been hostile to the idea of state and local governments assistance,” Mujica said.
Mujica said the governor will then consult with lawmakers, who can counter permanent cuts Cuomo proposes: “If there’s no federal aid, the governor has said everything will have to be on the table.”
Mujica said Cuomo is concerned tax hikes on the wealthy or a tax on stock transfers could drive away the stock market or roughly 100 billionaires.
The state could allow borrowing for New York City or dip into $2.5 billion in rainy day funds or $2 billion in legal settlements, he said: “It’s clearly a rainy day.”
But Mujica added: “All it does is delay a problem.”
State spending is down by over $4 billion this year as New York’s withheld local aid, delayed payments and frozen pay increases. And state tax revenue is down by over $3 billion through August — including $1 billion in less sales tax revenue — compared to last year, according to figures released Wednesday.
Congress’ $150 billion relief fund for state and local governments sent $1.4 billion to New York City alone and $5.1 billion to New York state government.
New York City would have received hundreds of millions more in emergency aid if Congress distributed funding based on need instead of population, according to State Comptroller Thomas DiNapoli.
His report released Wednesday is in line with an AP analysis finding some states with small populations took an outsize share of federal COVID-19 funds.
DiNapoli said New York City and Long Island are among a few communities nationwide that used over half their aid through June. New York state expects to spend its funds by Dec. 31.
“I’m still going to be an optimist that we’ll get something,” DiNapoli said in an interview Monday.