A state appellate court has upheld Gov. Christie's decision to withhold $475 million in public school aid to close the 2010 fiscal year budget deficit, rejecting the Perth Amboy district's claim that the governor had exceeded his authority.

In February, Christie withheld state aid to school districts equal to the amount of excess surplus in each district, encouraging schools to use up the surplus, if needed, in place of anticipated state aid. In doing so, the governor cited the "unprecedented" fiscal emergency faced by the state.

Perth Amboy school officials argued that Christie's action violated the constitutional principles of separation of powers because the Legislature had directed that the excess surplus be appropriated to a school district's subsequent fiscal year's budget.

The appellate court disagreed, ruling that under the state statutes, the Commissioner of Education "is granted broad powers to direct expenditures" to meet the requirements of a "thorough and efficient" education and to address emergency circumstances.

Perth Amboy schools lost more than $15 million in state aid as a result of Christie's action.