New York State may have the discretion to withhold federal funds from districts where more than 5% of students didn’t take the annual tests. Board of Regents Chancellor Merryl Tisch continues to assert that nearly 200,000 children refused the tests because of a dispute between the labor unions and the governor. Parents groups who have advocated for opting out as a protest against top-down decision-making and over-reliance on standardized testing insist that their actions were not influenced by the unions.

ALBANY—State education officials appear to have some discretion over whether districts or schools lose federal funding because of this month’s unprecedented boycott of standardized testing.

State officials had previously suggested that the matter was out of their hands. Representatives for the U.S. Department of Education and the state Education Department have said the federal government could withhold Title I funds—grants for schools that serve low-income students—if fewer than 95 percent of students in an individual school or district take the tests, and Governor Andrew Cuomo on Tuesday also said the federal government holds the power to decide whether to withhold funding.

Some parents have indicated that any effort to punish them or their children or their schools will inflame the opt out movement and help it grow.

But public statements and regulatory guidance from both the U.S. and state education departments suggest the decision is not totally up to the feds.

“They [federal officials] seem to indicate—I’m hearing that we have discretion, but we will find out how much discretion we have,” state Board of Regents chancellor Merryl Tisch told Capital on Tuesday. “If we do have discretion, we intend to use it.”

Tisch has said she hopes students won’t be punished for a disagreement among adults, attributing the so-called “opt out” movement to the fight between the state and teachers’ unions over controversial performance evaluations. According to unofficial totals compiled by parent activists, more than 100,000 children refused state English language arts tests last week, and the so-called “opt out” movement will likely continue when math exams start today.

Tisch said if it were up to her, she wouldn’t withhold funds. She acknowledged, though, that taking no action could further fuel the test refusal movement, validating the arguments of parent activists who have called officials’ warnings about funding cuts empty threats and an example of fear mongering.