Announcing that New York State has run out of cash, Gov. David Paterson announced yesterday that he had issued an executive order directing the state budget officials to cut-off state aid to schools, local governments and nonprofit service providers such as hospitals until the State has some money. In effect, New York State is now going to "slow pay" its debts and obligations until tax receipts catch up some time next year.
Budget Director Robert Megna told the Associated Press "We've had a revenue collapse over the last 24 to 36 month period. The state's cash position is at its weakest point in recent history."
At the last school board meeting, Schools Superintendent Richard Organisciak revealed that New Rochelle schools may lose up to $3 million in state aid already budgeted for in the school budget approved by voters last May. In addition, the state is increasing required pension contributions which will cost the district another $2 million. Schools officials have yet to announce what will be cut.