Carolina Journal News Reports
RALEIGH — Gov. Mike Easley’s administration and legislative leaders may have violated a state law in the distribution of discretionary funds to projects of nonprofits and local governments that had been considered but turned down by the General Assembly.
General Statute 143-16.3 says that the state government may spend "no funds from any source…for any new or expanded purposes, positions, or expenditure" which the legislature has already considered but failed to enact earlier in the same fiscal period.
The budget version approved by the state Senate in June 2004 included 13 special projects to be funded through the Office of State Budget and Management or the Department of Cultural Resources.
In subsequent versions of the budget bill, nine of those projects were dropped. The final budget passed by the General Assembly and signed by the governor in July contained only four of the projects included in the approved Senate Budget.
Records obtained from the Department of Cultural Resources show that that department later funded the nine projects that were dropped. The projects were $500,000 for Exploris Children’s Museum in Raleigh; $150,000 for the Historic Bath Tri-Centennial Celebration; $400,000 for the Graveyard of the Atlantic Museum; $1,500,000 for the Marine Corps Museum; $500,000 for the Penland School of Crafts; $400,000 for the Turnage Theater Foundation in Washington; $50,000 for the Rutherford County 225-Year Celebration; a $1,000,000 grant to Old Salem; and a $1,500,000 grant to the International Civil Rights Center and Museum.
Because those nine projects were considered earlier in the budget process but rejected as lawmakers approved the final budget, their funding under the discretionary process may have been illegal. The statute says the General Assembly has "considered" an appropriation "when that purpose is included in a bill, amendment, or petition and when any Committee of the Senate or House of Representatives deliberates on that purpose."
The government is allowed exceptions under the statute for expenditures from gifts, grants, funds from the Repair and Renovations Account, and funds allocated from the Contingency and Emergency Fund. None appear to apply to the discretionary funds controlled by the General Assembly leaders. If the Director of the Budget (the governor) declares that it is necessary to deviate from the law, he may do so after prior consultation with the Joint Legislative Commission on Governmental Operations. House Speaker Jim Black and Senate President Pro Tem Marc Basnight now control that commission.
The nine projects were part of a secret spending plan uncovered last week by the News & Observer. Legislative leaders controlled between $10 and $20 million in discretionary funds that had been appropriated to executive branch agencies under the control of Gov. Mike Easley.
Department heads in three agencies of the Easley administration approved almost 200 discretionary fund projects this fiscal year that were requested by either Basnight, Black, or former House co-speaker Richard Morgan. Easley has not yet commented publicly on the situation.
The Department of Health and Human Services, headed by Secretary Carmen Hooker Odom, awarded 47 grants. The Office of State Budget and Management, headed by State Budget Officer David McCoy, awarded 41 grants. The Department of Cultural Resources, headed by Secretary Lisbeth Evans, awarded 100 grants.
As first reported by CJ, the House leadership and the Senate leadership each controlled an additional $5 million of discretionary money at the Department of Transportation. Former N.C. Supreme Court Justice Robert Orr now heads the N.C. Institute of Constitutional Law. Orr told CJthat legislative control of discretionary funds “clearly raised a serious constitutional question about the separation of powers.”
[Read articles from the 1997 CJ series on slush funds]
Don Carrington is Executive Editor of Carolina Journal.