Hochul vetoes Panama fine forgiveness legislation

Gov. Kathy Hochul hadn’t vetoed much legislation since taking office in late August.

Her veto pen finally came out last week — and her hot-button issue was state fines to school districts. Hochul vetoed nine separate bills forgiving various state Education Department fines to school districts, including legislation that has now passed the state Legislature the past four years forgiving the remainder of Panama Central School’s original $4.9 fine for a late building project cost report.

The previous vetoes were issued by former Gov. Andrew Cuomo.

“I am deeply disappointed that Governor Hochul vetoed legislation (S.1798/A.6972) which would have released the Panama Central School District from paying the remaining $1.9 million of an unfair New York State Education Department penalty levied 16 years ago. There is zero justification for diverting critically-needed education dollars away from the classroom to pay a bureaucratic fine from almost two decades ago.,” said state Sen. George Borrello, R-Sunset Bay. “It is disappointing that our new governor has chosen to follow the same path as her predecessor, particularly since legislation that would have instituted blanket forgiveness was proposed as part of the budget process and rejected for political reasons. Therefore, there is no justification for vetoing this bill, which passed unanimously in both houses. “

According to Borrello, Cuomo had asked in past years that the fine forgiveness legislation be handled as part of state budget bills. The Senate included the legislation in its one-house budget bill, but fine forgiveness for Panama and several other schools was removed during negotiations between Assembly and Senate leadership and Cuomo’s office, though some schools did have their fines forgiven as part of the state budget.

Panama Central School District was assessed a $4.9 million penalty by the New York State Education Department (NYSED) that resulted from a late final cost report on a 2005 capital project. In 2005, the District completed a small maintenance project that it believed to be properly documented as “closed.”

In 2012, the district, upon reviewing the state’s website, found that it still had an “open” project on file. This information was not made available to Panama Central School when it was closing out its 2005 building project. In the eyes of the state Education Department, Panama Central School District neglected to file a final cost report for this building project within the required timeframe. The fine was partially paid through a series of Supplemental Valuation Impact Grants supported by Education Department/Aid to Localities budget bills. Senator Borrello’s legislation will forgive the remaining $1.9 million of the penalty.

“While assistance was secured over the years to help mitigate the negative impact, the remainder continues to be a burden on the district. This unresolved fine prevented a long-sought merger with the Clymer School District that would have been a great benefit to both students and taxpayers,” Borrello said. “No district should be put in this position, which is why I’ve supported legislation to forgive all state school districts who have been burdened with oppressive fines for building aid administrative reporting errors. It is incomprehensible as to why such a scheme was devised in the first place, but its elimination is long overdue. That is a goal that I will continue to fight for in the next session.”


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