The state Assembly has approved the controversial proposal for a state monitor to be appointed to the troubled East Ramapo School Board.
The bill would create a state-appointed monitor with veto power over the board.
A state investigation last year concluded the East Ramapo School Board diverted money from public schools to private yeshivas for Orthodox Jewish children.
Critics say the bill would set a dangerous precedent.
The proposal faces an uncertain future in the state Senate, however, because many Republicans oppose the bill.