Short exchange could hold the key to the Leandro case's final decision

Resolution of the latest dispute in North Carolina’s long-running Leandro case could depend on the response to one brief conversation. It lasted little more than a minute. But it highlighted the case’s key issue.

The exchange took place during Aug. 31 oral arguments before the N.C. Supreme Court. It took up roughly 1% of the time the state’s highest court spent that morning listening to and questioning lawyers. The exchange amounted to a tiny fraction of the hours of courtroom time devoted to an education funding lawsuit that dates back to 1994.

In a handful of sentences, the conversation focused attention on a critical legal issue state Supreme Court justices must resolve.

The court faces two key questions. First, can a trial judge order the state to spend more money on education? The current number on the table is $785 million. But that’s just one chunk of a larger court-sanctioned plan that could require billions of dollars of additional spending in the years to come.

The answer to that question could have significant constitutional implications for the state budget. The legislative and executive branches play clear roles in the budget process. The judiciary has played little to no role.

The second question carries at least as much constitutional significance. Justices must decide whether a trial court can bypass the General Assembly and order state executive branch officials to transfer money out of the state treasury to comply with a court order.

If the answer to the second question is no, then the answer to the first question essentially becomes irrelevant. A court could order the state to spend money. The legislature could decide to spend money in a different way. That would mark the end of the story.

That’s the context for the brief exchange on Aug. 31.

Former Supreme Court Justice Robert Hunter, representing the state controller, focused on the second question. Hunter argued that his client could not comply with a court order for a forced money transfer. State law and the controller’s oath of office require him to wait for legislative authorization before he moves any taxpayer dollars.

“As I understand the case law and the precedent, the court is perfectly free to issue declaratory judgments, and that is the constitutional, appropriate remedy … to this sort of situation,’ Hunter said. “But after that, after a declaration is made, having them pay a judgment is another entirely different question.”

Justice Sam “Jimmy” Ervin IV, a Democrat seeking re-election this fall, attempted to summarize Hunter’s legal argument.

“So your position is limited to the notion of you can … essentially tell the General Assembly, I assume, to spend the money. But … if they elect not to, there’s nothing more that can be done?” Ervin asked.

“I think that’s what you said in Cooper v. Berger, Justice Ervin,” Hunter responded.

Hunter was referring to a 2020 state Supreme Court ruling in a case pitting Gov. Roy Cooper against state legislative leaders, including Sen. Phil Berger. The two branches had battled over control of decisions surrounding federal block grant money.

Writing for a 6-1 majority, Ervin sided with the General Assembly.

“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,’” Ervin wrote less than two years ago. “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.’”

That’s forceful language. “No money” shall leave the state treasury without an appropriation. Lawmakers hold “full and exclusive control” over state spending. Legislative power is “supreme” in matters involving the public purse.

That language stands in contrast to signals Ervin’s three Democratic Supreme Court colleagues sent on Aug. 31. Each displayed sympathy toward Leandro plaintiffs and lawyers representing state government’s executive branch.

Both groups support the forced money transfer. They argue that the legislature has failed for too long to meet its constitutional requirement to provide N.C. students with a sound basic education.

But if Ervin goes along with that argument, giving the forced money transfer the fourth vote it needs from the state’s highest court, he will be repudiating his own words. He will ignore state constitutional history dating back to 1776.

At the end of the recent exchange with Hunter, Ervin said, “I take it from your answer then that in the event that the General Assembly elects not to comply, that’s the end of the matter.”

“There are remedies, which are nonjudicial, which could be applied,” Hunter responded. “I think this court has been very active in making sure that there are adequate political remedies for the people of North Carolina to change the legislature.”

In other words, if voters don’t like how the General Assembly decides to spend taxpayers’ money, they can vote in a new crop of legislators.

Whether Ervin accepts that line of reasoning could help determine the outcome of the latest Leandro dispute. His decision is bound to have major implications for the future of North Carolina’s constitutional system.

Mitch Kokai is senior political analyst for the John Locke Foundation.