Schumer says federal package could include more school aid
Says stimulus funds will offset state cuts
ALBANY — Public schools in the state could be in line for as much as $6.4 billion in aid from a federal stimulus package, reducing the need for major property tax increases to compensate for the loss of funds from the deficit-ridden state government, Sen. Charles E. Schumer said Monday.
With Gov. David A. Paterson standing by his side in the Capitol, Schumer said the federal bailout package is “likely” to include about $80 billion for education programs across the country.
School districts could use the money over two years without strings attached by Washington.
“Given the crisis and given how awful the numbers look, this should eliminate, or should alleviate rather, the severity of the crisis, and it’s a shot in the arm the state needs,” Schumer said.
Paterson suggested the education money, along with what Schumer last week said could be $5 billion for the state’s Medicaid health insurance program, could reduce the need for some of the fiscal steps he recently proposed to close the state’s deficit, including some of the more than $4 billion in unpopular tax and fee increases.
With the expected flood of money from Washington, Paterson stuck to his mantra that the state still needs to reform its spending ways — a prospect that likely will prove increasingly elusive as the cash from the federal government is drawn down to assist the state.
No one is saying exactly how the federal money could be used to reduce the state’s $15.4 billion deficit, in part, because no actual deal has been reached in Washington. But if the state actually receives the amounts Schumer is discussing, lawmakers and special interest groups would have considerable ammunition to oppose Paterson’s plans to cut spending and raise taxes.
“Any way we can lessen the cuts by greater federal aid, we are definitely supportive of,” said Assembly Speaker Sheldon Silver, a Manhattan Democrat.
Schumer said the total stimulus package, which could reach $800 billion, will be carved up into thirds, with money going to the states, infrastructure improvements and tax cuts.
“There’s a very strong likelihood that it will be included in the package, and leaders in both the House and Senate, as well as the Obama administration, have taken the request of the need for an education block grant to heart,” Schumer said.
The governor’s budget proposes nearly $950 million in education aid cuts, including $700 million in direct aid to public schools. Districts around the state say that would force them to cut student programs or sharply increase property taxes.
Schumer said he expects the bill to be passed early next month. Paterson had called on state lawmakers to trim nearly $2 billion in spending by Feb. 1 to erase a deficit in the current fiscal year, which will end March 31. That deadline, however, almost certainly will not be met — even though Paterson has softened his calls for immediate action — as the sides wait to see what the final stimulus package contains.
Paterson has talked of changing a mind-set about how state budgets can grow each year beyond the revenues to sustain the spending. While the federal aid may help push off some of the more painful cuts the governor has proposed, it probably will do little to further his quest for meaningful spending reforms.
“Even with the addition of resources from the federal government, it will all go to waste if we outspend it,” he warned. “So what we are going to have to do is change the culture of spending in this state.”
Paterson couldn’t exactly say how the education money might be earmarked. Discussions ranged from direct aid to schools to new money for school construction and even some money for the state university system.
“I’m sure most of the districts will use a good portion of it to mitigate any increases in property taxes,” Schumer said.
The senator said the plan will give the state “a little breathing room” during the economic downturn. The idea, he said, involves putting money into the economy instead of states taking money out through such cuts as spending on schools.
“Hopefully, within two years, the economy will be humming along again,” Schumer said.
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