BUFFALO, N.Y. (CBSNewYork/AP) — A judge Thursday blocked New York state from withholding $250 million from New York City schools as punishment for missing a deadline to adopt a teacher evaluation plan.

In granting a preliminary injunction, state Supreme Court Justice Manuel Mendez said a lawsuit brought by a group of parents challenging the penalty has merit. He froze any sanctions pending final outcome of the case.

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Governor Andrew Cuomo’s administration said it would appeal.

The lawsuit contends it would be unconstitutional to withhold funding from students who had nothing to do with an impasse between the city and the United Federation of Teachers over how to measure the performance of teachers and principals.

State law pushed by Cuomo to protect federal Race to the Top funding required all of New York’s nearly 700 school districts to have an approved evaluation system in place by Jan. 17 in order to receive a state aid increase in the current school year.

New York, with 1 million students, was among a handful of districts to miss the deadline.

Mayor Michael Bloomberg and schools Chancellor Dennis Walcott have said the resulting funding loss would mean the elimination of 700 guidance counselor and teacher positions, bigger class sizes and cuts in pre-kindergarten special education, after-school and anti-bullying programs, according to court documents.

The Cuomo administration countered that the penalty represents a relatively small part of the district’s total budget. The bigger risk, the governor said, is the potential loss of Race to the Top money if the state doesn’t live up to its promise of implementing a new evaluation system.

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“This is a preliminary injunction and the state intends to appeal,” Cuomo spokesman Richard Azzopardi said.

Parent Mona Davids, president of the New York City Parents Union and a plaintiff in the case, said the children were the “innocent victims of politics.”

“We need Governor Cuomo to put our children first, be the students’ lobbyist and waive the $250 million dollar penalty,” she said in a statement. “In the meantime, we will continue to fight for our children’s rights in the public school system and a seat at the education policy table.”

Attorney Michael Rebell, who represents the parents, said he hoped the state would drop the penalty, especially in light of Cuomo’s announcement this week that, to avoid further cuts, he would empower Education Commissioner John King to impose an evaluation system June 1 if the city and union don’t agree on one by then.

“There doesn’t seem to be any reason for this (penalty) anymore,” Rebell said.

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