A New York State Supreme Court Judge Harold J. Hughes on Friday issued a restraining order stalling deficit bond sales by Nassau and Suffolk counties and the town of Huntington.
The order was granted after Robert L. Schulz and the All-County Taxpayers Association filed a lawsuit to block the deficit bond sales. The order to show cause and arguments are scheduled for Aug. 21.
Gov. Mario M. Cuomo last week signed bills allowing the counties, Huntington, and six other local governments to sell deficit bonds or notes to close operating budget gaps in their fiscal 1992 budgets.
Mr. Schulz said in a news conference on Friday, "Our feeling is this whole concept of tax-supported debt to finance operating budget deficits is wrong and unconstitutional and should be attacked.
Mr. Schulz is considered a legal gadfly who has sought to block or have declared unconstitutional certain state financing practices. To date, he has lost most of his cases.
Officials from the counties, Huntington, the state budget division, and the governor's office could not be reached for comment.
Richard Barr, a spokesman for the New York State Attorney General, said on Friday, "We are in here representing the state because the state is named in the lawsuit. But this decision does not affect the state. This decision directly impacts on the counties" and Huntington.