New judge in N.C. school funding case sets schedule leading to April 13 hearing

The legal dispute over $1.7 billion in court-ordered N.C. education funding will head back to a Wake County courtroom on April 13. The new judge overseeing the dispute set that date during his first online meeting Thursday with lawyers involved in the case.

The parties left the meeting with competing views about the issues Special Superior Court Judge Michael Robinson should address. Robinson faces an April 20 deadline to return the case to the state Supreme Court.

Lawyers representing both the N.C. Justice Department and the plaintiffs in the case believe Robinson should stick to “accounting” issues. That’s the term Senior Deputy Attorney General Amar Majmundar used.

He and plaintiffs’ attorney Scott Bayzle agreed Robinson’s sole task is to determine whether the state budget adopted last November covers any of the new education spending included in a November 2021 court order. That order called for more than $1.7 billion to be transferred out of the state treasury for education purposes.

At one point, Majmundar offered a rough estimate that the budget might cover 30-35% of the funding in the spending order.

On the other side of the debate, attorneys representing state legislative leaders say the number might be closer to $900 million of the $1.7 billion. Plus Republican legislators’ attorney, Matthew Tilley, argued that Robinson should address another important question: whether the adoption of a state budget last November rendered the entire $1,7 billion spending order moot.

Judge David Lee entered the $1.7 billion order eight days before final resolution of the state budget. The judge took the extraordinary step of ordering state officials to transfer money for education only because lawmakers had not yet finalized a budget, Tilley argued. Once a budget was put in place, the entire basis for Lee’s order went away, Tilley argued.

Parties in the case learned this week that Supreme Court Chief Justice Paul Newby had replaced Lee with Robinson to oversee the case moving forward. Lee had presided over legal matters related to the school funding dispute since 2016. Officially titled Hoke County Board of Education v. State of North Carolina, the case is known by most parties as Leandro. That was the name of one of the original plaintiffs in the case in 1994.

Robinson signaled early in the 90-minute hearing Thursday that he was not inclined to take a broad look at the larger issues Tilley mentioned.

“The court will certainly consider your position, but its initial reaction is that there is no way that this court could engage in that kind of analysis within the time frame that the Supreme Court has given me to come back with a ruling,” Robinson said.

But the judge did not bar Tilley from making arguments going beyond Majmundar’s “accounting” issues.

The judge instead called on the state’s executive branch to produce its assessment of the budget impact on Lee’s order by April 4. Other parties must submit briefs by April 8, with reply briefs due April 11. With the in-person hearing scheduled April 13 in Wake County, Robinson will have a week to render a decision before returning the case to the Supreme Court by April 20.

Both Bayzle and attorney David Hinojosa, representing a different set of plaintiffs, raised objections about looking at any issues other than numbers. For them, Robinson’s only duty is to compare state budget provisions with the line items of Lee’s spending mandate. They argued that the legislators’ broader arguments should be made to the state Supreme Court.

Robinson is addressing the case now only because of a Supreme Court order. Justices agreed Monday to consider Lee’s $1.7 billion spending mandate. With that decision, the high court took the case away from the state Court of Appeals. Before conducting its own review, the Supreme Court returned the case to the trial level. Justices called for a 30-day assessment of the state budget’s impact, if any, on Lee’s plan.

The Appeals Court had blocked Lee’s spending order, based on a request from State Controller Linda Combs. Combs’ attorney argued that compliance with the court order could have forced her to violate state law. The controller cannot take part in any transfer of money that’s not based on an appropriation from the legislature, Combs contended.

Former Supreme Court Justice Robert Hunter, representing Combs at Thursday’s hearing, repeated those concerns. He warned about the “very complex” process used under normal circumstances to transfer money out of state government’s General Fund.

To the extent Lee’s order required unappropriated money to be moved out of the treasury, the results would be “problematic,” Hunter said. He warned that such an order could force the controller, state treasurer, and others to commit crimes and “impeachable offenses.”

Once the case returns to the state Supreme Court next month, there is no timeline for a final decision.