Latest order in N.C. school funding case adds new twist to $1.7 billion dispute
One line in a new court order could mark a major new development in the long-running legal battle over education funding in North Carolina. The line strikes at the heart of a constitutional dispute about $1.7 billion that has reached the state’s highest court.
Judge Michael Robinson’s order Friday requests information and legal argument about “The effect of the appropriations in the 2021 Appropriations Act on the ability of the Court to order the Legislature to transfer funds to the Department of Health and Human Services, Department of Public Instruction, and the University of North Carolina System.”
Robinson’s focus on the legislature could signal a significant development. An order targeting the elected members of the legislative branch would stand in stark contrast to a $1.7 billion spending order issued by a different judge, David Lee, on Nov. 10.
Lee’s previous order bypassed the General Assembly. Lee called on the state controller, state treasurer, and other executive officials to transfer money out of the state treasury with no legislative input.
An objection from State Controller Linda Combs prompted the N.C. Court of Appeals to block the $1.7 billion order. Combs argued that Lee’s Nov. 10 order would have forced her to violate state law. She could authorize a transfer of money only with the support of a legislative appropriation, her lawyers said.
Next, supporters of the additional education spending appealed successfully to the state Supreme Court to consider Combs’ objections.
The state’s highest court is slated to debate the issue. First, it has asked Robinson to review the impact of the current state budget on Lee’s original order. Gov. Roy Cooper signed the budget into law eight days after the $1.7 billion order took effect.
During an initial hearing Thursday, lawyers for the plaintiffs in the case agreed with lawyers from N.C. Attorney General Josh Stein’s office about the nature of Robinson’s review. They contend Robinson should focus largely on “accounting” issues.
They believe Robinson should compare the budget to line items spelled out in Lee’s $1,7 billion spending plan. To the extent that the budget funds elements of Lee’s plan, Robinson could amend the amount of court-ordered spending.
Robinson’s latest order addresses that type of review. He requests information about “The amount of the funds appropriated in the 2021 Appropriations Act … that directly fund the various programs and initiatives called for in the Comprehensive Remedial Plan.”
The CRP formed the basis of Lee’s $1.7 billion order.
The judge also wants to know how much money is left in the state’s coffers, seeking “The amount of funds remaining in the General Fund currently both in gross and net of appropriations in the 2021 Appropriations Act.”
Beyond the comparison of spending numbers, attorneys for legislative leaders believe Robinson faces a larger question. The budget act itself renders the entire $1.7 billion spending order moot, they contend.
Lee took the extraordinary step of bypassing the General Assembly only because lawmakers had not finalized a budget by Nov. 10, they argue. With a budget in place by Nov. 18, Lee’s justification for court action disappeared.
Even if Robinson rejects the legislators’ mootness argument, Thursday’s hearing signaled that Stein’s Justice Department lawyers and those representing the legislature hold different views about the budget’s impact on the $1.7 billion.
While a Justice Department lawyer offered a ballpark estimate that the budget might have addressed 30-35% percent of the court-ordered plan, legislators contend they have covered as much as $900 million of the $1.7 billion.
The state is scheduled to submit a more formal calculation of the budget’s impact by April 4. Lawyers will offer competing assessments of the state’s computations prior to an April 13 hearing before Robinson in Raleigh. Robinson plans to issue a ruling and return the case to the Supreme Court by April 20.
Regardless of the numbers involved, the case would take a major turn if Robinson amends Lee’s existing order or issues a new one and directs it to the legislature. Such a move would shift the debate over education funding back to the General Assembly.
It also could render moot the controller’s objections. Combs would no longer face the threat of a court mandate to transfer money out of the state treasury without legislative authorization.
With no dispute from the controller left to resolve, it’s unclear what issues would be left for the Supreme Court to consider.
Robinson’s latest order arrived just four days after Chief Justice Paul Newby assigned him to the case. It’s an extension of a courtroom saga that started in 1994. Officially known as Hoke County Board of Education v. State of N.C., participants and observers often refer to the legal dispute as Leandro. That name comes from one of the case’s original plaintiffs. The state Supreme Court already has issued two full Leandro opinions in 1997 and 2004.
Newby offered no reasons for the decision to reassign the case to Robinson. Lee, a retired Union County judge, had overseen Leandro hearings since 2016. Prior to Lee’s involvement, now-retired Wake County Judge Howard Manning had served as the designated Leandro trial judge.