Wil Cruz. Newsday. 5/4/2005.

A state Appellate Division panel yesterday refused to overturn a stay in Gov. George Pataki's appeal of a court order giving city schools billions of dollars in additional funding.

In issuing its order, the court said it would hear the appeal of State Supreme Court Justice Leland DeGrasse's order in October.

DeGrasse ruled this year that city schools need an additional $5.6 billion in operating funds over the next four years and $9.2 billion in capital funds over the next five years to bring them up to par.

The Campaign for Fiscal Equity, which filed suit in 1993 accusing the state of shortchanging city schools, had asked that the stay be lifted in hopes of having the issue resolved in time for the upcoming academic year.

"Even though the stay was not lifted, we're gratified that the court granted our motion to expedite review of the case," Michael Rebell, the group's executive director, said of the October hearing.

Pataki has maintained that DeGrasse overstepped judicial boundaries and failed to address accountability measures in his order.

Kevin Quinn, a spokesman for Pataki, said in a statement yesterday that DeGrasse's order ignored "fundamental, separation-of-powers principles" and should be reviewed by the state's highest court.