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It's been a week since the state teachers' union and school officials filed a lawsuit challenging the Governor Paterson's decision to withhold hundreds of millions of dollars from school districts around the state. On Wednesday, the governor announced that he's filing a brief in New York State Supreme Court in response to the lawsuit.

"It is my job to protect the security of New Yorkers and therefore I will not be intimidated in this process," Paterson said. "I absolutely will not shirk my responsibility."

He said the law is clear that he has the authority to keep New York State solvent.

"I absolutely will not allow those special interests to ruin the state's credit and the state's financial position based on what they see as some sacred privileges they have," he said.

Paterson says he withheld the payments because the state didn't have the money to cover them – but that he plans to repay the money in January, when he expects the state to have more revenue.

The groups that filed the lawsuit have argued that the governor can't unilaterally withhold the money they've been counting on – money that's been approved by state lawmakers.

"Remember, he went to the legislature twice and asked for them to cut school aide and they said no," said Timothy Kremer of the New York State School Boards Association. "So he's doing this on his own."

Some argue that talking tough on the budget and casting himself as a strong fiscal manager is a good political move for the governor. Indeed, a poll out earlier this month showed his job performance rating inched upward.

One observer noted that the governor's stance on the state's finances could be stabilizing his administration, giving it an even keel on which to enter 2010. But that's only the first step.

"He has to go beyond the statements," said David Birdsell of Baruch College. "He has to be able to show he has the political clout to get some of this done, and that's very much an open question."

The answers to that question should start to come in the coming months, as the governor continues to wrestle with the legislature over the state budget – and an estimated $6.8 billion deficit that looms for the next fiscal year.