The fate of hundreds of millions of N.C. taxpayer dollars rests in the hands of state Supreme Court justices. The same is true for the future of separation of powers within state government.
Both budgetary and constitutional issues are tied to the high court’s forthcoming decision in the Leandro education funding lawsuit.
In related news, the judge at the heart of the latest Leandro dispute died this month after battling cancer.
Leandro could tie up hundreds of millions of dollars — and eventually billions — from the state treasury. It also could influence future relations among state government’s legislative, executive, and judicial branches.
The N.C. Supreme Court has not yet released its Leandro decision. A court order has explained that justices will produce a ruling on a date of their choosing after Aug. 31 oral arguments.
The court will decide whether a trial judge can order the state to spend an additional $785 million for education-related items. Justices also will decide whether the courts can bypass the General Assembly and order the money transferred out of the state’s coffers.
Those are the key questions in the latest stage of Leandro, a case that dates back to 1994.
“Whether the judiciary can order the state to implement and fund money for a sweeping, eight-year, 146-item, comprehensive remedial plan … that would remove decision making over education from the people and dictate education policy and spending for the state for a decade is yet another question,” said attorney Matthew Tilley, representing Republican legislative leaders, early in the Aug. 31 hearing.
Lawmakers oppose both the court-ordered spending and the forced money transfer. They contend that the state Supreme Court cannot use one decades-old trial about public education in a single county, Hoke, to justify measures that would apply to every school system in the state.
Legislators also raise questions about a Leandro plan developed by state government’s executive branch without legislative input. That multiyear plan has a price tag of at least $5.6 billion, with the chance that the cost could rise substantially based on multiple mandated studies.
“The executive branch is going to be necessarily tempted to use admissions in a court case to get orders that would provide agencies things that they can’t get in the legislative process,” Tilley said. “It’s a way to circumvent the process.”
The state controller argues against the forced money transfer. It would place him in a “double bind,” attorney Robert Hunter argued. The controller would violate state law and violate his oath of office if he transfers money without authorization from the legislature. “We’re all for the schoolchildren of North Carolina getting whatever money they’re entitled to through an appropriation process.”
Justice Sam “Jimmy” Ervin IV, one of four Supreme Court Democrats, asked Hunter about the implications of his argument.
“Your position then is limited to the notion that you essentially can tell the General Assembly … to spend the money, but if they elect not to, there’s nothing more that can be done?” Ervin asked.
“That’s what I think you said in Cooper v. Berger,” Hunter replied, citing Ervin’s 6-1 decision in a 2020 case. At that time, Ervin confirmed that state government’s legislative branch holds complete power over the state treasury.
Justice Robin Hudson, also a Democrat, pushed back on Hunter’s argument. She cited language from an earlier 2004 state Supreme Court Leandro ruling.
“This court said when the state fails to live up to its constitutional duties, the court is empowered to order the deficiency remedied,” Hudson said. “If the offending branch fails to do so or consistently shows an inability do so, a court is empowered to provide relief by imposing a specific remedy and instructing the recalcitrant state actors to implement it.”
Lawyers representing both state government’s executive branch and the Leandro plaintiffs argued in favor of both the court-ordered spending and the forced money transfer.
N.C. Senior Deputy Attorney General Amar Majmundar pushed back against legislators’ arguments that they alone control how money is spent. “To accept the truth of their claims would be to make broadly acceptable the idea that one branch of government can nullify the other two simply by controlling the money — that the branch with the purse has all the power.”
Attorney Melanie Dubis reminded the court that she has represented Leandro plaintiffs for 27 years. She labeled the issue before the justices “very narrow.” “When the state of North Carolina violates the fundamental, affirmative constitutional right to the privilege of education — for 20 years — can this court do anything about it?”
“This is a unique right — the right to the opportunity to a sound basic education,” Dubis said. “As a co-equal branch of the state, the court has a duty to guard and maintain that right.”
“The legislature is not above the law,” Dubis added. “The legislature cannot carry out its constitutional duties in an unconstitutional way, which is what it has done for the last 20 years.”
Democrats hold a 4-3 majority on the state’s highest court. Two Supreme Court seats are up for election this year, both held by Democrats. A Republican victory in either election would shift partisan control back toward the GOP.
As observers await a decision from the state’s highest court, the trial judge who ordered the forced-money transfer died on Oct. 4. A funeral home confirmed this week that Judge David Lee died at home in Monroe of complications from cancer. He was 72.
Lee’s November 2021 court order called for $1.75 billion in additional state spending for Leandro items. Lee ordered the state controller, treasurer, and budget director to move the money out of the state treasury.
Supreme Court Chief Justice Paul Newby replaced Lee in the Leandro case in March. There were no reports at the time about Lee’s health.
In April new Leandro Judge Michael Robinson whittled Lee’s order down to $785 million in new court-ordered spending. Robinson also threw out the portion of Lee’s order calling for the forced money transfer.
Now Supreme Court justices must decide which portions of the November and April orders will move forward.
A version of this article originally appeared in the Oct/Nov print edition of the Carolina Journal.