The state's schools chancellor admitted Tuesday night that New York may not apply for the second round of the Race To The Top competition for federal educational funding.

Merryl Tisch, the chancellor of the state Board of Regents, seen above right, said at a charity benefit at the Plaza Hotel that state officials may not even attempt to get $700 million in federal education funding.

"I am here tonight to tell you that I have issued a public statement an hour ago, saying that as the leader of this state's education authority, we will not submit an application that we do not believe is going to be competitive," said Tisch at the event.

Tisch told NY1 she will not put the state through the humiliation of submitting another application with no chance of winning.

New York came in 15th out of 16 finalists for the first round of the competition. Only the top two states, Delaware and Tennessee were awarded cash.

President Barack Obama's administration said it will award states that do not limit the number of charter schools and allow test score data to be used to evaluate teachers. Those two measures were considered by policy makers in Albany, but did not pass before the first-round deadline in January.

If those changes are not made before the second round deadline on June 1, Tisch said the state won't submit an application at all.

"We have a three-week window of opportunity in this state in which we can force our stakeholders to come to the table, to talk to us about raising the charter cap, to talk to us about appropriate teacher evaluation, to talk to us about the appropriate use of data in making informed, intelligent decisions about our children," said Tisch.

Governor David Paterson fought for the legislative changes in January and has said the state will try again to win the cash.

When NY1 asked the governor on Wednesday whether he's made any progress with legislators, he laughed.

"Right now, I am trying to get legislature to pass a budget. They were very resistant to the whole 'Race To The Top' concept," said Paterson.

Tisch said state education officials will work to get the legislation passed by June 1, but with lawmakers bitterly divided over these issues, it is going to be a tough sell, even with so much money on the line.

The Obama administration has said its looking to reward states where all the players, including the unions, are on the same page.