The N.C. Supreme Court has agreed to jump back into the state’s long-running school funding legal dispute. The court wants a trial judge to assess the impact of the new state budget on a $1.7 billion order for additional state education spending.

A Supreme Court order issued Monday evening grants requests from both N.C. Attorney General Josh Stein’s office and plaintiffs in the case titled Hoke County Board of Education v. State of North Carolina. Both urged the Supreme Court to take the case out of the hands of the N.C. Court of Appeals.

State legislative leaders had asked the Supreme Court not to intervene.

Before Supreme Court justices take any action, they want a new review of retired Union County Judge David Lee’s November 2021 order to transfer $1.7 billion out of the state treasury for education spending.

“This case is remanded to Superior Court, Wake County, for a period of no more than thirty days for the purpose of allowing the trial court to determine what effect, if any, the enactment of the State Budget has upon the nature and extent of the relief that the trial court granted in its 11 November 2021 order,” according to the Supreme Court’s order. “The trial court is instructed to make any necessary findings of fact and conclusions of law and to certify any amended order that it chooses to enter with this Court on or before the thirtieth day following the entry of this order.”

“As soon as the trial court has certified to this Court any amended order that it chooses to enter, this Court will enter any such other and further orders governing the procedures to be followed in this case as it deems necessary,” the Supreme Court added. “In the meantime, the otherwise-applicable schedule for filing briefs in this case is held in abeyance pending further order of the Court.”

Terry Stoops, director of the John Locke Foundation’s Center for Effective Education, has been watching the case closely. “Gov. Roy Cooper signed a bipartisan state budget designed to address the unique academic and mental health needs of children harmed by measures devised to mitigate the spread of COVID,” Stoops said. “The comprehensive remedial plan formulated by a California-based consultant and approved by Judge Lee is incompatible with our post-pandemic educational environment. Judge Lee should take this opportunity to rework the remedial plan by incorporating input from lawmakers and other stakeholders previously ignored in this process.”

Before the Supreme Court stepped in, the legal dispute over Lee’s order had been sitting in the N.C. Court of Appeals.

A Feb. 28 brief from state lawmakers explained why they believed the Appeals Court should continue to address the case. Republican legislative leaders opposed requests from both the plaintiffs and Stein’s state Department of Justice.

“Although DOJ and Plaintiffs urge the Court with ever-increasing fervor to bypass the Court of Appeals and take up this case immediately, such an extraordinary step is not warranted at this time,” according to the brief from attorney Matthew Tilley, representing legislative leaders. “On its current posture, this case does not provide a vehicle to decide the ‘urgent’ and ‘important’ constitutional questions DOJ and the Plaintiffs ask the Court to consider, nor does it provide an opportunity to give ‘final, dispositive answers’ resolving this litigation.”

Legal fights over N.C. education funding stretch back to 1994, with the filing of a case now known by the shorthand name Leandro. The disputes have produced two state Supreme Court decisions, the more recent one in 2004.

The latest point of contention involves Lee’s Nov. 10 order. As part of a deal reached between the plaintiffs and Justice Department lawyers, and endorsed by Lee, the judge ordered state officials to transfer $1.7 billion from North Carolina’s treasury for education-related expenses. That money would fund portions of the deal, known officially as the Comprehensive Remedial Plan. Lee’s order bypassed the General Assembly.

The N.C. Court of Appeals blocked Lee’s order. Appellate judges ruled Lee had no power to transfer money without authorization from legislators.

The adoption of a state budget last fall should have an impact on the case, legislative defendants argued. Gov. Roy Cooper signed that budget “just eight days after” Lee’s spending order, Tilley wrote.

“DOJ largely ignores the adoption of the Budget Act in its Petition; Plaintiffs never mention it at all,” he explained. “Instead, DOJ and Plaintiffs persistently argue Superior Court Judge W. David Lee entered the November 10 Order because the General Assembly supposedly ‘failed’ or ‘refused’ to fund the Comprehensive Remedial Plan.”

“But Judge Lee made clear in his order that he believed such an extreme remedy was justified only because, at the time he entered it, there was no budget,” Tilley wrote. “The adoption of the budget rendered that assumption moot”

Beyond the impact of the state budget, legislative defendants focused on the importance of state government’s separation of powers.

“While DOJ argues whether the judiciary can transfer funds out [of] the State treasury to ‘remedy constitutional violations’ is an open question, it is not,” Tilley wrote. “This Court has consistently held that ‘appropriating money from the State treasury is a power vested exclusively in the legislative branch’ and that the judicial branch ‘lack[s] the authority to “order State officials to draw money from the State treasury.”

“This is because ‘the power of the purse is the exclusive prerogative of the General Assembly,’” according to the legislators’ brief. “And, accordingly, ‘the Separation of Powers clause prevents the judicial branch from reaching into the public purse on its own’ even if to remedy the violation of another constitutional provision directing how those funds must be used.”

Cooper and Stein, both Democrats, have butted heads with the Republican-led General Assembly over legal issues.

Republicans outnumber Democrats, 10-5, on the Appeals Court. Democrats hold a 4-3 advantage on the Supreme Court. But two Democratic seats on the high court are up for election this year.

Had the case proceeded through the normal appellate process, it’s possible that Republicans would have regained a Supreme Court majority by the time the school funding dispute reached them.

The Supreme Court’s timeline should return the case to the justices by mid- to late April.