New York

Judge invalidates NYC schools budget, setting up education showdown

The City Council is getting another bite at the schools budget apple.

Manhattan Supreme Court Justice Lyle Frank followed through Friday morning on his pledge to declare the Education Department’s fiscal year 2023 budget unlawful and order school spending back to last year’s levels until the Council and Mayor Adams decide whether to hold a revote on the budget.

The order doesn’t outline a specific time line for a revote, and Council sources didn’t immediately say if or when they’d seek one.

But some Council members — still smarting over the fallout from their decision to adopt the original $37 billion budget, which locked in hundreds of millions in controversial school cuts — say they’ll take the opportunity.

“We in the City Council are prepared to take action where the mayor has failed,” wrote Council members Shekar Krishnan (D-Queens) and Gale Brewer (D-Manhattan) in a letter posted Thursday night. Both pols voted to approve the original budget.

Adams, asked about the stunning ruling Friday morning, played it cool.

“Listen, the city is going to be fine,” he said. “Trust me. It’s part of the process.”

The city Law Department filed a notice of appeal shortly after Frank issued his decision.

“We are disappointed in the judge’s ruling,” said Adams spokeswoman Amaris Cockfield. “Students, teachers and parents need finalized budgets to ensure they are on track for a smooth opening next month.”

The judge’s order is likely to have ripple effects beyond just the Education Department, despite Frank’s attempt to limit the scope of his ruling, budget experts said.

Last year’s Education Department, budget was roughly $1 billion higher than the now-invalidated budget. Without adjusting spending at any other agencies or adding revenue, the order leaves the entire city budget temporarily out of balance, according to George Sweeting, the acting director of the Independent Budget Office.

“Now that you’ve adopted a budget, you can’t just take one piece out and leave the rest exactly as they are,” Sweeting said.

The city is required under state law to maintain a balanced budget. An unbalanced budget at the end of the fiscal year would raise the possibility of intervention from a state financial control board installed after the city’s budget crisis in the 1970s, Sweeting said.

The Council and mayor have two main options to fund a bump in Education Department spending without cutting other agencies, Sweeting added. The first is adding more of the roughly $4.4 billion in remaining pandemic-related federal stimulus money to this year’s budget — an idea Adams has resisted. The other would be for the city to proclaim it will receive more tax revenue than it previously projected.

The Council was already in negotiations with the mayor before the lawsuit to redirect $250 million in the existing budget to schools that saw reductions.

“We’re going to seek to resolve the issue regardless of and outside the case,” said a well-placed Council source.

It’s not unusual for the Council and mayor to adjust the budget throughout the year in response to revised revenue predictions, but Sweeting said it’s “unprecedented” for the budget adjustment to stem directly from a judge’s order.

City lawyers previously argued that an order forcing the Education Department’s budget to return to last year’s levels prohibits the agency from advancing any new initiatives — such as a program to support dyslexic students.

Frank appeared to try to head off that argument in his Friday order, writing that “nothing in this order shall prevent … the implementation of the dyslexia program already being created by the [Education Department].”

He added that the ruling does not prohibit the Education Department, from shifting funding around within the agency to cover staff transfers, like when a classroom aide must switch schools to follow a child with a disability who changes schools.

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