State says nearly $800 million from Leandro order remains unfunded

State officials report that close to $800 million remains unfunded from a judge’s $1.7 billion state education spending order. That assessment resulted from a court-ordered comparison of the spending plan and the new state budget.

The $1.7 billion order was designed to fund items from the second and third years of a court-imposed Comprehensive Remedial Plan. The plan resulted from a long-running school funding legal dispute called Leandro.

Gov. Roy Cooper signed the state budget last November, eight days after the court issued the $1.7 billion Leandro spending order.

“Our analysis found that S.L. 2021-180 [the budget act] funds 63 percent of Year Two Action Items of the Comprehensive Remedial Plan and 49 percent of the Year Three Action Items of the Comprehensive Remedial Plan,” according to an affidavit from Kristin Walker, chief deputy director of state budget for Cooper’s Office of State Budget and Management.

“This means that approximately $257,418.175 in the Comprehensive Remedial Plan is unfunded in Year Two and approximately $537,409,782 is unfunded in Year Three,” Walker added. Added together, the total unfunded portion of the order is $794,827,957.

Walker also offered a status report on the amount of money available in state government’s General Fund. With $2.38 billion “unappropriated and unreserved” in the current budget year, another $22 million in 2022-23, and an additional $1.134 billion designated for the state’s savings reserve “rainy day fund” in both years, the total of unappropriated savings reserve sits at $4.25 billion.

As of March 25, state government had a gross cash balance of $9.84 billion and a “net unreserved cash balance” of $4.79 billion, Walker reported.

These numbers arrived Monday in response to an order from Special Superior Court Judge Michael Robinson. Robinson is now overseeing the Leandro case, officially known as Hoke County Board of Education v. State of N.C.

The state Supreme Court ordered the trial court to determine whether the state budget should lead to any changes in the $1.7 billion order issued on Nov. 10 by Robinson’s predecessor, Judge David Lee. Chief Justice Paul Newby replaced Lee with Robinson on the same day the high court ordered the review of Lee’s spending order.

All parties in the case face a Friday deadline to respond to the state’s newly released numbers. Plaintiffs in the case could decide to challenge or accept the state’s assessment. Legislators, who opposed the $1.7 billion order, could object to both the state’s numbers and the order itself. Attorneys for state legislative leaders have argued that a state budget approved by large bipartisan majorities and signed into law by Cooper rendered Lee’s spending order moot.

Another player in the case, State Controller Linda Combs, is likely to urge Robinson to avoid any future order that forces her to move state money without legislative authorization. It was an appeal from Combs to the N.C. Court of Appeals that prompted the latest Leandro legal action.

Robinson is scheduled to hear arguments in the case April 13. He faces an April 20 deadline to return the case to the state Supreme Court. Robinson could leave Lee’s original order intact, amend it, or take other actions to account for the impact of the state budget on the Leandro case.

“The analysis offered by the North Carolina Office of State Budget and Management is an informative comparison of state budget provisions and the Comprehensive Remedial Plan,” said Terry Stoops, director of the Center for Effective Education at the John Locke Foundation. “But it does not change the fact that the General Assembly remains the only branch of state government empowered by the North Carolina Constitution to direct taxpayer dollars to public schools.”