Yonkers City Councilmembers are drafting a package of legislation to respond to the growing budget crisis the City faces following a $55 million accounting error by the Yonkers Board of Education. One measure to retain outside counsel to better understand the City’s legal options to challenge the new State budget review process is expected to pass as early as next week.
“Like any budget, there are good parts and bad parts,” Majority Leader John Larkin said. “However at this time we are unified in our belief that the Deficit Act is in need of a ‘do over’ while we work with our State delegation to perhaps amend the Deficit Act, and should that fail, authorize outside counsel to pursue a legal challenge.”
Last week, Yonkers City Councilmembers met with the State Comptroller and Education Department were advised that the recently passed State deficit financing authorization for the Yonkers City budget (the “Deficit Act”) contains provisions that they feel usurp their authority to issue budget recommendations locally. The State Attorney General has declined to issue an opinion on the Deficit Act, saying that the City budget process does not allow enough time to formulate a reliable opinion on such an unprecedented issue.
“The Deficit Act was passed without a home rule request or emergency message by the Governor, which makes it unconstitutional,” Council President Liam McLaughlin said. “The Deficit Act is an assault on home rule, and if we don’t act now, municipalities across the State could see their budgeting powers usurped by Albany.”
The current City budget proposes using Albany’s authorization to borrow $44 million dollars, which will cost the City $6 million per year in debt service over the 10-year life of the bonds and result in a $1 million windfall for the Wall Street bond salesman. The Deficit Act only allows the bond revenue to be used to liquidate the deficit in the school district general fund.
“Assuming the City has the financial wherewithal to pay the $6 million per year debt service it would cost to borrow the $45 million, the money comes with the stipulation that the Comptroller and Commissioner of Education now have the ability to mandate changes to the City Budget that we must implement,” Council member Dennis Shepherd said. “The Deficit Act is taking away our voice and the voice of the people of Yonkers in matters of the budget.”
The Council members intend to retain outside counsel to help preserve all available options, while they also seek to challenge the underlying failure by the State to properly fund public education, including the Yonkers schools. They will also seek legislation directing the Corporation Counsel to prepare to intervene in New Yorkers for Students’ Educational Rights (NYSER) v. State of New York, a lawsuit which seeks equitable school funding.
Councilmember Mike Breen noted that the borrowing authorization would not have been necessary if the schools were funded properly all these years. “Under the State Gap Elimination Adjustment, $90 million of our school funding is currently being held back by Albany, starving our schools of the dollars needed to provide a sound and basic education,” he said.
During yesterday’s budget hearing on education, the Yonkers Public Schools Superintendent conceded that City students are not receiving the funding necessary to provide a sound basic education. Thus the Council will introduce a bill that seeks to intervene in the lawsuit, which has recently been brought to compel the State of New York to provide all students in the State’s public schools with the proper amount of funding to correct these inequities.
Syracuse receives $290 million in state funding under the same formula that provides Yonkers with only $235 million, while locally the White Plains school district saw a school funding increase of nearly 25 percent this year, while Yonkers received only a 7.67 percent increase. Press conferences, public hearings and special Council meetings regarding these and other new proposals to restore fiscal accountability are expected in the next several weeks.
Liam McLaughlin, Esq. is president of the Yonkers City Council.