New Leandro funding order could be three weeks away

Cumberland County Superior Court Judge Jim Ammons (Image from Friends of Judge Jim Ammons for Superior Court Facebook page)

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  • The new judge in North Carolina's Leandro education funding case could issue a ruling on a new spending order within three weeks.
  • Judge James Ammons will not issue an order forcing state government officials to transfer money without the General Assembly's input.
  • Most parties in the case believe the state's outstanding Leandro obligation is $677.8 million. Legislative leaders urge Ammons to cut the number to $376.5 million.

The judge overseeing North Carolina’s long-running Leandro education funding lawsuit signaled Friday that he might issue a new spending order in the case within three weeks. That announcement followed more than 2 1/2 hours of courtroom debate over the amount of money to be included in that order.

Superior Court Judge James Ammons asked parties in the case to submit their competing findings and conclusions by Friday, March 24. Ammons said he would aim to issue his decision “within another week or two” after receiving that information. Later, he referenced having “an answer within two weeks” of his March 24 deadline.

Ammons confirmed he would not issue a “transfer order” forcing state government officials to move any money without legislative approval. That was one of the key pieces of the Leandro case that returned the issue to the N.C. Supreme Court last year.

“I have been instructed by the Supreme Court to issue a transfer order in my original order,” Ammons said as the hearing concluded. “That’s now not possible because they have reinstated the writ of prohibition from the Court of Appeals. So I do not intend to do that.”

The transfer order was part of a November 2021 ruling from Judge David Lee, who oversaw the Leandro case at the time. Lee determined that state government needed to spend $1.75 billion more than the education funds included within the state budget. The extra money would cover unfunded items listed in two years of a multiyear, court-endorsed plan.

Called the comprehensive remedial plan, it’s designed to meet North Carolina’s constitutional education obligations. State government’s executive branch and Leandro plaintiffs have signed onto the plan, which was based on the work of a San Francisco-based consultant.

In addition to ruling that the state needed to boost its education spending by $1.75 billion, Lee also ordered that the state budget director, controller, and treasurer transfer the money without consulting the General Assembly. That “transfer order” prompted the controller to seek a “writ of prohibition” from the N.C. Court of Appeals. Appellate judges issued the writ. It stopped the transfer order.

The state Supreme Court blocked the “writ” last November, in a 4-3 party-line decision authored by the court’s Democratic justices. Now with a 5-2 Republican majority, the newly constituted Supreme Court has reinstated the writ. The high court plans to address outstanding Leandro issues in the months ahead. Those issues include the controller’s concerns about the legal impact of a forced money transfer.

Ammons referenced the Supreme Court’s November order that a trial judge should continue to oversee a case that started in 1994. Known to most observers as Leandro, the name of the original lead plaintiff, the case is officially titled Hoke County Board of Education v. State.

“I promise I won’t be here in 29 years, but I don’t know how much longer I’ll be here, or how much longer this case will come back before this court or the Supreme Court,” Ammons said. “And that’s fine. There’s been a lot of time and energy and money litigating this over the years, but that’s the way our system works. I don’t mean to shortchange anybody or criticize anybody for pursuing their rights.”

Most of Ammons’ hearing focused on disagreements between lawyers representing state legislative leaders and lawyers for all other parties.

Plaintiffs and intervenors in the case agree with lawyers from state government’s executive branch that Ammons should set North Carolina’s current outstanding Leandro funding obligation at $677.8 million.

Eight days after Lee issued his original $1.75 billion order in November 2021, Gov. Roy Cooper signed a state budget into law. In an April 2022 order, Lee’s successor as the Leandro presiding judge determined that the budget covered more than half the funding included in Lee’s original plan.

At that time, the state’s Leandro obligation was whittled down to $785 million. Cooper later signed another budget document, and the state Supreme Court’s November order asked the Leandro judge to determine how much of the $785 million remained unfunded.

The Office of State Budget and Management calculated the $677.8 million figure, with money slated to head to the state Department of Public Instruction, Department of Health and Human Services, and University of North Carolina System.

Anca Elena Grozav, chief deputy director of state budget at OSBM, defended the calculations during questioning from lawyers at Friday’s hearing.

State legislative leaders raised two types of objection to OSBM’s numbers. First, lawmakers believe the state budget office shortchanged the amount of funding dedicated to comprehensive remedial plan items by roughly $44 million. Lawmakers believe the corrected figure should be $633.7 million.

They raised a second argument that would have a larger impact on the bottom line.

When Lee issued his November 2021 order, parties considered the state as operating in the second year of the multiyear CRP. Lee’s order was designed to cover items in the plan’s second and third years.

Now the state is operating in year three. Lawmakers object to state government lawyers “double counting” recurring expenses that appeared in both year two and year three of Lee’s calculations. Money for a particular program should count just once, legislators’ attorneys argued to Ammons.

Remove the items that appear twice, and the state’s overall outstanding Leandro obligation would drop to $376,564,002, according to calculations from the General Assembly’s Fiscal Research Division. That’s more than $300 million less than state executive branch officials recommended.

As Ammons wrestles with those numbers in the weeks ahead, it’s not clear when the state Supreme Court will take another look at Leandro. The case already has produced major state Supreme Court decisions in 1997, 2004, and 2022.