A New York State Supreme Court judge has returned the education portion of the city’s budget back to the City Council and the mayor for reconsideration in a move that is likely to throw public school finances into further uncertainty just a month before students return to classes.

Judge Lyle E. Frank ruled in favor of plaintiffs who argued the city's budgeting process for schools violated state law, granting a preliminary injunction and authorizing a do-over on education funding. The news comes after weeks of political outcry from parents, teachers and lawmakers over steep cuts to schools that have been losing students.

“The New York City [Fiscal Year 2023] budget as it relates to expenditures by the Department of Education only is vacated,” the judge wrote in his three-page order, signed Friday.

“[It] is further ORDERED that the New York City Council and the Mayor of the City of New York shall be authorized to amend the Fiscal Year 2023 New York City budget” for education, the judge said. While the order allows officials to renegotiate the education budget, it does not require them to do so.

In the meantime, he said spending on schools should “revert” to last fiscal year’s levels, which were higher because they utilized a larger portion of federal stimulus funding.

A spokesperson for Mayor Eric Adams said the city is appealing the decision.

“Students, teachers, and parents need finalized budgets to ensure they are on track for a smooth opening next month,” spokesperson Amaris Cockfield said. “We are disappointed in the judge’s ruling, and will be taking immediate steps to appeal.”

Budget watchdogs called the situation “unprecedented.”

“We haven’t had to do a budget redo for one agency before,” said Ana Champeny, vice president for research at the Citizens Budget Commission.

It was not immediately clear how the appeal will affect the judge’s order, though education advocates said it would only further delay preparations for the new school year.

The ruling is a major setback for the Adams administration, which argued it was necessary to reduce school budgets by hundreds of millions of dollars because of declining enrollment. The school system has lost more than 80,000 students since the start of the pandemic.

Since June, principals faced with less funding have been looking to cut costs, eliminating teacher positions and programs. In response, parents and teachers have escalated pressure on the mayor to reverse cuts, with parents dogging him at events across the city.

Council members who voted for the budget have said they regret doing so, indicating they will seek to restore money for schools. But the Council and the mayor will now have to figure out how to revise education spending while keeping the overall budget in balance.

The judge’s decision did not focus on the impact of the cuts but the bureaucratic process that led to them. State law says an education oversight body — the Panel for Education Policy — is supposed to vet and then vote on education spending before it goes on to the City Council and is passed as part of the overall city budget. This year, the schools chancellor issued an emergency order to move the process along, and those steps happened in reverse.

I don’t understand why we have to fight the city and the DOE for the funding our schools need and hope that City Council does the right thing

Plaintiff Tamara Tucker, a parent at P.S. 215 in Harlem

Plaintiff Tamara Tucker, a parent at P.S. 215 in Harlem, praised the judge.

“I am grateful and relieved that Judge Frank is holding the city and DOE accountable for circumventing the procedures of the budget approval process that allowed the voices of the community to be excluded and ignored,” she said. “I don’t understand why we have to fight the city and the DOE for the funding our schools need and hope that City Council does the right thing now that they have the opportunity to revote.”

“Now is the time for Mayor Adams to work with the City Council to restore the funds to our public schools,” said United Federation of Teachers president Michael Mulgrew.

Some 700 teachers have lost their positions and have to apply for new jobs because of the cuts.

But Champeny of the budget commission said the judge’s order raises a series of new questions. If lawmakers seek to increase funding for schools, they will have to decide whether to move money within the education department, or find it elsewhere in the financial plan.

Comptroller Brad Lander has called for the education department to use unspent federal stimulus funds to make up the difference.

Champeny warned that continuing to depend on stimulus money to prop up school budgets risk bigger gaps in the future. “It’s basically kicking the can down the road, and the can is going to be bigger,” she said. “You’re putting off a problem that will be a bigger problem next year potentially.”

Champeny said her organization is also worried about precedent. “We’re concerned this could lead to more advocacy for budget do-overs that could create more uncertainty, which would be unfortunate.”

She said it is also unclear what it means to require education funding to revert to last year’s levels.

Perhaps the most immediate question is how quickly additional funds for schools could be available for principals to maintain programs they thought they had to cut.

“Right now an individual school principal is not clear on what this order means to his or school budget,” said Mark Cannizzaro, president of the Council of School Supervisors and Administrators. He said he’s encouraging them not to count on new funding at this point, but added, “If they get them, they’ll be welcome."

He said it was helpful that the Adams administration offered some more flexibility this week in how schools could use the federal stimulus funding they had already been allocated, and that the education department had begun distributing funds to principals who said they would not be able to provide legally mandated services.

“They have to plan,” he said. Classes are scheduled to resume September 8th.

This story has been updated with additional information.