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Sponsor's memo
BILL NUMBER:S7939
Title of bill
An act in relation to requiring the BNP Paribas settlement to pay off any gap elimination adjustment
Purpose
This legislation requires any settlement between the state and BNP Paribas to be applied to the gap elimination adjustment.
Summary of provisions
Section 1: Notwithstanding any other provision of law, rule or regulation to the contrary, any money received by the state from any settlement with BNP Paribas shall be used to offset any gap elimination adjustment referred to in section 3602 of the education law.
Section 2: Provides for an immediate effective date.
Justification
The Gap Elimination Adjustment (GEA) was introduced in 2010 as a purported temporary solution to closing New York State's $10 billion budget deficit. Effectively, it spreads out some of the state's fiscal shortfall among all school districts by reducing the amount of Foundation Aid that the state pays to the districts. In short, this means reductions in jobs and programs for public schools. While this year's budget saw the PEA reduced by $3 billion, there is still a hefty $1 billion to go. The question now arises of how New York State can pay off any GEA while minimizing the burden on the districts.
With the French bank BNP Paribas' $8.9 billion settlement for breaching US laws and sanctions recently announced, New York State will receive over $3 billion. The settlement money will go directly into the State's general fund, but its allocation going forward remains unknown. This legislation would invest the $3 billion settlement back into New York State's local schools. Under the proposal, the $1 billion remaining in the GEA would be eliminated for good.
Paying off the onerous and ill-conceived GEA with the BNP Paribas settlement money could save public schools from another year of funding reductions and unnecessary job cuts. The undue burden not only rests on the shoulders of school districts but also on the students who suffer in the aftermath of faculty and program reductions. The temporary solution that was the GEA has run its course and should be paid off once and for all.
Prior legislative history
New Bill
Fiscal implications
To be determined
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.