BC aid deferral totals $4.1 million

The Bethlehem Central School District is faced with another late state aid payment after Gov. David Paterson recently announced he would withhold $2.1 billion of such funds when the state budget failed to pass on time.

BC is scheduled to receive $4.1 million in this round of quarterly state aid payments, which usually go out March 31, right before the end of the state's fiscal year. Paterson has said the state simply does not have the cash on hand to make the payments, though, and will aim to push them back to June.

The late payment is unlikely to pose a serious danger to BC, said district CFO Judith Kehoe, but it might make emergency borrowing necessary further down the road.

It's purely a cash flow impact that we can manage without changing any of our practices, she said. "We would use our existing cash on hand."

The district is expected to have $8 million in its fund reserve by the end of this school year. Schools often take out loans in July in anticipation of tax receipts in September and not having the aid payment by June could increase the severity of that shortfall.

The school board has adopted a 2010-11 budget that uses $2.3 million of the reserve fund to defray increases to the tax levy.

Paterson took similar actions in December, when he delayed $750 million in payments, the smallest of the quarterly dispersals. That action drew lawsuits from teachers unions.

BC has since received that aid payment.

Paterson has been reported saying it's likely the next round of payments normally made in June will be delayed for lack of cash, as well. New York government is effectively living hand-to-mouth as legislators try to deal with a crippling and widening deficit.

Superintendent Michael Tebbano said as long as the payments do eventually make their way to the school district, BC could cope with the delays since it's well situated with a good fund balance. But as a full third of the district's revenue stream, state aid isn't something the schools can live without.

"Right now, we're managing all these delays appropriately. I think we're doing everything we can to minimize the impact on the program," Tebbano said. "If [Paterson] delays anything next fall, we'll have to handle that as it happens."


Vote on this Story by clicking on the Icon


Use the comment form below to begin a discussion about this content.

Sign in to comment