The N.C. Supreme Court has affirmed the General Assembly’s control over state spending decisions. A new 6-1 ruling rejects the governor’s attempt to bypass lawmakers in determining how federal block grants should be spent.

A 43-page opinion from Justice Sam Ervin IV affirms earlier court rulings upholding state lawmakers’ constitutional power to control money flowing into the state treasury. Justice Anita Earls cast the only dissenting vote.

“[W]e hold that the General Assembly did not overstep its constitutional authority by appropriating the relevant federal block grant money in a manner that differs from the Governor’s preferred method for distributing the funds in question,” Ervin wrote.

The dispute arose in 2017, when the Republican-led General Assembly approved a budget that spent funds from three federal block grant programs in ways that differed from those spelled out in Gov. Roy Cooper’s budget proposal. Cooper vetoed the budget, but lawmakers voted to override the veto.

Cooper went to court, filing one of a series of cases dubbed Cooper v. Berger. He argued that the General Assembly’s actions encroached upon his executive authority. The dispute involved roughly $17 million from a $20 billion General Fund budget.

The governor lost this case at every stage. A trial court judge and a unanimous three-judge panel both affirmed the General Assembly’s power to decide how state money is spent.

“The appropriations clause of the North Carolina State Constitution provides that ‘[n]o money shall be drawn from the State treasury but in consequence of appropriations made by law, and an accurate account of the receipts and expenditures of State funds shall be published annually,'” Ervin wrote. “In light of this constitutional provision, ‘[t]he power of the purse is the exclusive prerogative of the General Assembly,’ with the origin of the appropriations clause dating back to the time that the original state constitution was ratified in 1776.”

“In drafting the appropriations clause, the framers sought to ensure that the people, through their elected representatives in the General Assembly, had full and exclusive control over the allocation of the state’s expenditures,” he added.

“As a result, the appropriations clause ‘states in language no man can misunderstand that the legislative power is supreme over the public purse.’”

Ervin rejects each of Cooper’s arguments attempting to distinguish federal block grants from other state funds controlled by the state budget process.

“After a careful review of the relevant legal authorities, we have been unable to find any provision of the North Carolina State Constitution that creates a category of money that might possibly include the federal block grant monies that lies outside the State treasury or the General Assembly’s appropriation authority,” he writes. “The General Assembly enacted the state budget embodied in Session Law 2017-57 in accordance with N.C. Const. art.III, §5, as it was required to do so.

“In enacting the annual State budget, the General Assembly was fully entitled to disagree with the recommendations relating to the manner in which the funds derived from the relevant federal block grant programs should be spent set out in the Governor’s recommended budget given that ‘the legislature has no duty to adopt [the budget] as recommended,’” he added.

Earls sided with the governor. “The particular federal block grants at issue in this case are appropriately subject to the discretion of the executive,” she wrote in her solo dissent. “In reaching the opposite conclusion, the majority ignores our precedent defining the extent of executive authority in the face of delegated authority from our state and federal legislatures, misinterprets our prior case law regarding the limits on legislative authority, and ignores the guidance of other courts who have faced this same issue.”

“While doing so, the majority permits the legislature to upset settled expectations between this state and the federal government about how the block grant programs will be used and threatens the independence of the separate branches of government in this state,” Earls concluded.

Sen. Warren Daniel, R-Burke, who co-chairs the Senate Judiciary Committee, responded to the ruling. “The N.C. Supreme Court’s well-reasoned decision in this matter was firmly grounded in the text of the Constitution and years of precedent,” Daniel said in a news release.

Daniel noted Attorney General Josh Stein’s friend-of-the-court brief supporting Cooper. “It’s unfortunate that Attorney General Stein valued expansion of executive power over the rule of law,” Daniel said. “Most first-year law students could look at the plain text of the Constitution and previous rulings from the Supreme Court and conclude that the Attorney General’s preferred outcome would be a grave violation of basic legal principles. The law, not politics, should come first in our state’s top law enforcement office.”