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State releases $750M in delayed payments to schools

ALBANY - New York State Friday will send $750 million in payments to school districts, cities and counties that had been delayed by Gov. David A. Paterson to prevent the state from running out of money last month.

Paterson said Thursday that he was keeping a promise made weeks ago to release the withheld funds once the treasury was replenished with tax collections from bonuses paid to Wall Street financiers.

"Because revenues have now come in to the extent that we were expecting in January, I am now . . . going to complete all the payments to everyone who was supposed to get money from the state in December," Paterson told WOR radio in Manhattan. "That will be the end of this chapter but not the end of this problem."

He raised the specter of a second round of delayed payments in March if lawmakers fail to help him eliminate a $500-million deficit in this year's budget. New York's bills in March will total $12 billion to $14 billion.

"Once again we're worried about where our revenues are," Paterson said. "If the legislature does not close this budget deficit or tries to come up with some gimmick to delay the problem, we'll be right back where we were."

Fearing more withheld payments, education groups didn't drop the lawsuit they brought challenging Paterson's authority to unilaterally delay spending approved by lawmakers. The groups, however, lauded the release of funds, saying school districts now wouldn't have to fire teachers, eliminate extracurricular activities and classes in art and music.

"We are elated that the governor has had a change of mind," said Richard Iannuzzi, president of the New York State United Teachers union who taught for 34 years in Central Islip.

He and others said no decision had yet been made on whether to continue the suit. "I'm not going to let it stop if it means the potential that kids will be denied what they need," Iannuzzi added.

Of the $750 million due, school districts will receive $436 million in STAR property-tax reimbursements and $146 million in education aid. Cities, including Long Beach and Glen Cove, will get $45 million in revenue sharing.

Nassau, Suffolk and other counties will divide $76 million in reimbursements for providing welfare, foster care and other services for the poor. Insurers will be paid $47 million for medical coverage of state workers.

A spokesman for Comptroller Thomas DiNapoli said the money would be deposited in the respective accounts by this evening.

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