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City schools budget still in flux, but rainy-day funds are restored

Principals who were in the final stages of a school-supplies spending spree might want to put their wallets away.

Back in January, Chancellor Dennis Walcott told principals that they would not be able to save any of their school’s funds from this year to use next year, a practice that allows schools to plan ahead in an uncertain budget climate. That gave the principals an incentive to spend down their last dollars this spring.

But hours after Gov. Andrew Cuomo announced a state budget deal earlier this week, bringing the Department of Education’s financial situation into clearer relief, Walcott announced that he had retracted the decree.

“I am pleased to tell you this morning that we have found a way to avoid the cancellation of this program and our principals will be able to roll unspent money into Fiscal Year 2014,” Walcott told members of the City Council during a hearing about the department’s proposed budget. Today, he spelled out the details in an email to principals.

Principals have two weeks — until April 8 — to finish their purchases for this school year. Money they don’t spend will go into their budget for next year, assuming that their schools aren’t operating in the red. But principals still won’t be able to save as much as they could last year. Last year, savings were capped at $80 per student, but this year schools can roll over only $70 per student, according to an email Walcott sent to principals today.

Still, the announcement is a clue that department officials are confident about their ability to weather without too much difficulty forgoing $240 million in state school aid lost because the city has not yet adopted new teacher evaluations. The budget deal that legislators reached late on Wednesday includes a large increase in state aid over what Cuomo originally proposed for the city, although details about the funding aren’t yet public.

This isn’t the first time the “Deferred Program Planning Initiative” has been a barometer for In 2010, department officials reversed plans to tap into the rainy-day funds after principals argued the cuts would penalize them for planning prudently. But two years ago, the department garnished some of the savings, allowing principals to hold on to the rest. Last year, the rollovers were capped again.