Westchester County v. Board of Trustees, 7 N.Y.3d 833 (2006)

Amendments to regulations granting greater fiscal independence to community colleges by allowing them to control line-item budgets are not inconsistent with Education Law § 6304(6), as local sponsors retain significant oversight through budget contributions, board representation, and audit authority.

Summary

Westchester County and the New York State Association of Counties challenged amendments to regulations by the Board of Trustees of the State University of New York, arguing they improperly reduced local sponsor control over community college budgets. The amendments allowed community colleges to approve their “budget total” instead of the “total budget” and removed the requirement for local sponsor approval for budget transfers. The Court of Appeals held that these amendments were not inconsistent with Education Law § 6304(6), as local sponsors retained significant oversight, including the ability to influence budget amounts, appoint board members, and require audits. This decision affirmed the intent to grant community colleges greater fiscal independence while maintaining local sponsor accountability.

Facts

In 2003, the Board of Trustees of the State University of New York amended regulations concerning community college budgets. Previously, local sponsors approved the “total budget” and all appropriation transfers. The amendments changed this, allowing local sponsors to approve only the “budget total” and permitting colleges to transfer appropriations without sponsor approval. These changes were intended to align with 1988 amendments to Education Law § 6304(6), which aimed to provide community colleges with greater fiscal autonomy.

Procedural History

Westchester County and the New York State Association of Counties initiated a combined CPLR Article 78 proceeding and declaratory judgment action. They sought to annul the 2003 amendments to the regulations. The Appellate Division’s order was modified by the Court of Appeals to declare that the regulations at issue are not inconsistent with Education Law § 6304(6), and, as so modified, affirmed.

Issue(s)

Whether the 2003 amendments to the regulations, which grant greater fiscal independence to community colleges, are inconsistent with the language and intent of Education Law § 6304(6).

Holding

No, because despite the amendments, local sponsors retain significant oversight of community college budgets through their ability to influence the total budget amount, appoint members to the college’s board of trustees, and require periodic audits and reports from the college.

Court’s Reasoning

The Court of Appeals reasoned that while the 2003 amendments reduced the local sponsor’s role in the budget approval process, they did not eliminate it entirely. The court emphasized the local sponsor’s continued ability to influence the budget by increasing or decreasing its contribution. Furthermore, the local sponsor appoints half of the college’s ten-member board of trustees and can require audits and reports from the college. The court also noted that the elimination of the line-item veto did not alter the requirement that college boards submit their budget for approval by the local legislative body. The court cited Matter of General Elec. Capital Corp. v New York State Div. of Tax Appeals, Tax Appeals Trib. 2 NY3d 249, 254 (2004), stating that the amendments “are not inconsistent with the statutory-language or its underlying purposes.” The Court further stated that the regulations have “a rational basis [that] is not unreasonable, arbitrary, capricious or contrary to the statute under which it was promulgated” referencing Kuppersmith v Dowling, 93 NY2d 90, 96 (1999). The court concluded that the amendments aligned with the Legislature’s intent to grant community colleges greater flexibility and autonomy in the budget process, as evidenced by the legislative history of the 1988 amendments to Education Law § 6304(6).