ALBANY, N.Y., Oct. 5 (UPI) -- New York's top education official said the state's schools should forget about the $1.4 billion for extra school aid, expected to be approved this month, because of costs associated with the terrorist attacks on the World Trade Center.
"Is this a huge shock to the system?" asked Richard Mills, state education commissioner. "Yes. Is it a big shock? Yes. What do we do? Press on."
The effect of the attack on lower Manhattan will affect each student in the state -- school buildings, some more than 100 years old, will not be renovated, teachers won't get raises, teachers will not be hired and special programs to meet the state's new standards will be put on hold.
New York spends $14 billion a year on education, and more than $700 million in additional school aid was passed as part of the state's "bare-bones" budget earlier this year, but legislators had expected to pass more money for education, health insurance, nursing homes, non-profits and other state needs. More than $1.4 billion had been earmarked for education.
On Thursday, Gov. George Pataki's budget director estimated the terrorist attacks may cost New York state as much as $9 billion in lost revenue in the next two years -- more than 5 percent of the state budget.
"I know Governor Pataki is certainly not going to want to undo a lot of the tax reductions that we've accomplished so far, so I'm really not anticipating at this point that that's the direction we'll be taking," said Carole Stone.
Stone estimated that the state could be hit with a $3 billion loss this fiscal year and $3 billion-$6 billion in fiscal year 2002-2003. The state does have a "rainy day" fund of less than $3 billion, but Stone said state agencies have been told to devise no-growth budgets for next year and not expect any more money from a supplemental budget expected to be passed this month.
While the state may be able to get around not increasing taxes, cities and towns may not.
Since local property taxes pay for most of the bill for schools, localities may have to raise taxes.
Hardest hit will be the urban school districts, which already spend less per pupil than wealthier suburban school districts. A lawsuit pending would require the state to make up the difference between what is spent per pupil in the city school districts versus the suburban school districts -- estimated at $1 billion.
Cities have a harder time increasing taxes than the suburbs because that's where the state's poorest people live and property taxes in New York already are some of the highest in the nation. Upstate cities have lost 5 percent to 10 percent of their population in the last decade.
Buffalo, N.Y.'s school system had been counting on almost $25 million from the supplemental budget but the city's school administration has frozen hiring, overtime and purchases.
The governor proposed an $83 billion budget in January but the legislature wanted to spend several more billion. The disagreement lasted for months, long past the April 1 deadline, but the legislature, in agreement with the governor, passed a "bare-bones" budget of $79.6 billion with the understanding that a supplemental budget would be passed later this month. According to Stone, the state spent $78.6 million last year.
"We're still looking at the ramifications of Sept. 11 and what that means," said Skip Carrier, spokesman for New York Assembly Speaker Sheldon Silver, a Democrat. "Everything, education, health care, the economic development for upstate New York is being reassessed."
Pataki has said that in the wake of the terrorist attacks he would like to address the state's budget issues by not raising taxes or laying off state workers.
New York State Senate Majority Leader Joseph Bruno, a Republican, wants outside experts to take a look at the budget, but he thinks some "essential spending" could be done in the supplemental budget.
The state also is looking at a high increase in security costs for public spaces throughout the state.
New York City Mayor Rudolph Giuliani said Friday, as he released his semiannual report,
the Mayor's Management Report, that before the attack, New York City was "in good shape."
"The city was in good shape, the budget was in good shape and the city has been able to respond as well as it has because we were well prepared," the mayor said. "The effect would have been different had the attack occurred a few years ago when the city was in much worst condition."
On Friday, Giuliani reported:
-- 4,979 people are registered as missing by the police
-- 4,417 missing reported by family members
-- 8,786 people injured
-- 380 declared dead
-- 321 identified dead
-- 1,013 requested gov't assistance Thursday
-- 1,363 death certificate requested
-- 220,000 tons of material and rubble removed
-- 12,325 truckloads of rubble removed
-- 70 buildings damaged but stable, repair, leaning
-- 12 buildings listed with major structural damage
-- no single occupancy cars, with exceptions, allowed to enter Manhattan below 63rd St.
-- bridge traffic into Manhattan down 12 percent to 75 percent
-- $100 million a week estimate for clean up
-- $100 billion estimate for cost of attack
-- $7 billion estimate to remove WTC rubble
n school attendance 88.4 percent (before Sept. 11 level)
(Reporting by William M. Reilly in New York City)