While the state struggles with its own revenue losses, schools and the state teachers union say this is the worst time to be withholding aid

ALBANY — Add school districts and colleges to the local entities who have had their state aid held back by 20% amid the state's fiscal woes due to the COVID-19 pandemic.

New York's roughly 700 districts learned late last week that $324 million in payments for July and August would be withheld as the state grapples a $14 billion revenue decline to the virus' impact on the economy.

The money represents a fraction of the $28.5 billion in aid that the state provides schools each year, which is the most per capita in the nation. And it is part of $1.2 billion the state has delayed to cities, counties and other programs and services in recent months.

But schools decried the delay in payments and whether it might become part of larger, permanent cuts as they need to spend more money this fall to prep schools for COVID safety measures to reopen.

And SUNY colleges are also dealing with enormous fiscal pressures as they reopen this month. The delayed payment to colleges is even larger than to K-12 schools: about $431 million, state records show.

Whether the delay is ultimately lifted will likely depend on whether Congress gives a bailout to states all struggling with unprecedented drops in revenue, New York officials said.

“As we first said in April, the lack of federal funding to offset the State’s revenue losses — amounting to $62 billion over four years — would force the state to temporarily hold back a 20% portion of payments as they are made over the course of the year, including for school districts which started in June," said Freeman Klopott, spokesman for the state Budget Division.

The $1.7 billion delay in state aid has counties, cities and schools already making plans to cut their own budgets, fearful they'll end up with permanent holes in their fiscal plans.

On Tuesday, the Rochester City School District said it would cut its budget by an equal 20% in reaction to the state cut.

The state Association of Counties has estimated the cuts to counties may reach $670 million this year, which would lead to fewer local services and programs.

For schools, the immediate delays in payments are relatively small, but "it’s extremely alarming as an indication of what is in store for schools if Washington does not come through with more help for states," said Bob Lowry, deputy director of the state Council of School Superintendents.

The larger school payment this year will come in September and most of those payments come from lottery revenue, which has also tanked due to the closure of the state's casinos.

Lowry said the delayed payments come on top of "dealing with uncertainty over requirements and other extraordinary challenges in planning how to reopen schools next month. Continuing hold-backs of aid could derail all those plans."

The New York State United Teachers union derided the payment delays to schools and colleges, saying it is the worst time to be withholding aid.

“We know that however schools and colleges open this year, it will require many additional expenses," NYSUT president Andy Pallotta said in a statement.

"Without funding to cover the massive costs of PPE, barriers, cleaning supplies and more, local school districts and campuses will not be able to meet the goal of safely reopening schools for all.”

It is unclear whether the cuts will be made permanent. That will depend on what is another round of federal stimulus, which is currently in a stalemate in Congress.

The state's updated budget plan released last week said, "All or a portion of these withholds may be converted to permanent cuts, depending on the size and timing of new federal aid, if any.”