Judge hears arguments about whether NC should transfer $795 million to public schools
Lawyers for North Carolina public schools and state lawmakers clashed Wednesday over whether a judge should order the transfer of nearly $800 million in state funds into public education.
In November, state lawmakers approved a budget that partially funds a court order to transfer $1.75 billion from the state treasury to fund the Leandro school action plan. On Wednesday, a new judge assigned to the case heard competing legal arguments over whether to require the state to turn over the remaining funding.
“The plaintiffs want today the same thing they wanted 28 years ago when this case was filed,” said Melanie Dubis, an attorney representing the low-wealth school districts suing the state for more funding. “And that is to have the state live up to its constitutional obligations to the children in these counties and across the state of North Carolina.”
But attorneys for state Senate leader Phil Berger and House Speaker Tim Moore argued that only the General Assembly can appropriate state money, not the courts.
“The question here is not a difference between those who want to fund education and those who don’t,” said Matthew Tilley, an attorney representing the Republican-led General Assembly.
“It is between people who have legitimate and genuine disagreements about how to use the state’s resources and how we resolve that as a people, the way our Constitutional system resolves that, is to put it to the legislative process.”
By April 20, Special Superior Court Judge Michael Robinson will decide whether to amend the court order before it goes to the state Supreme Court for review.
Providing a sound basic education
The court hearing is the latest chapter in the long-running Leandro school funding case.
The Leandro case was initially filed in 1994 by low-wealth school districts to get more state funding.
Over the years, the state Supreme Court has ruled that the state Constitution guarantees every child “an opportunity to receive a sound basic education” and that the state was failing to meet that obligation. But the high court has held off on ordering the state to approve a specific funding plan.
David Lee, a retired Union County judge and registered Democrat, was assigned the case by the Supreme Court in 2016.
In a Nov. 10 court order, Lee wrote that the courts had waited long enough for state lawmakers to act. He ordered the state treasurer, state controller and state budget director to transfer $1.75 billion to fund the next two years of a multi-year action plan developed by an education consultant.
The consultant’s plan includes things such as pay raises for principals and teachers, hiring more teacher assistants, increased funding for low-wealth school systems and expansion of the state’s Pre-K program.
Soon after, a three-judge state Court of Appeals panel blocked enforcement of Lee’s order. The two GOP judges on the panel said Lee exceeded his authority.
On March 21, the state Supreme Court, which has a Democratic majority, agreed to hear the case again. But the justices first gave the trial judge 30 days to review the state budget’s impact on the November court order.
Also on March 21, GOP Chief Justice Paul Newby issued an order replacing Lee with Robinson, a registered Republican. A spokesman for Newby has cited how Lee had reached the mandatory retirement age for judges. But Lee hadn’t asked to be removed and could have stayed on with Newby’s approval.
How much is being spent on plan?
Robinson asked for estimates of how much the state budget funds the Leandro plan.
According to the state budget office, the budget funds 63% of the Leandro plan this year and 49% next year. This leaves around $795 million unfunded.
The legislature’s Division of Fiscal Research includes federal grant money to say $1.2 billion of the plan is funded in the budget.
“It almost doesn’t matter what money has been spent,” said senior state Deputy Attorney General Amar Majmundar. “What’s more important is the money that’s not being spent because that’s what we’re required to do.”
Majmundar is representing the state in the case, which has gone from fighting the school districts to working with them since Roy Cooper, a Democrat, become governor.
While both sides disagreed on how much of the plan is funded, there was an acknowledgment that several areas were not. Cooper had proposed fully funding the Leandro plan in his budget but ultimately signed the budget approved by lawmakers.
“The General Assembly in the exercise of its constitutional authority admits that it chose to do some things and not others,” said Tilley, the attorney for lawmakers. “It did not accept the governor’s proposed budget fully.”
But David Hinojosa, an attorney representing the Charlotte Mecklenburg branch of the NAACP, said at the hearing that what’s missing is new funding that the plan called for to help at-risk students.
“This isn’t just a wish list,” Hinojosa said. “Believe me, if this was a wish list for the best in education you can have, it would be much longer and deeper. This meets those minimal requirements for a sound, basic education.”
What should judge do?
An affidavit from Kristin Walker, chief deputy director in the N.C. Office of Budget and Management, says there will be $4.25 billion in the state’s savings reserve as of June 30, 2023, barring any legislative action.
Attorneys for the state and the school districts say Robinson should just take a narrow focus to only review the state budget’s impact on the plan. They said the constitutional issues should be left up to the Supreme Court.
“There is money available,” Majmundar said. “There is a shortfall in the plan. We are currently in defiance of that plan and we believe those are the parameters that the Supreme Court intended this court to undertake.”
Tilley said lawmakers may want to hold off on dipping into savings to prepare for concerns such as another wave of COVID and to avoid any potential budget shortfalls that could lead to teachers being laid off.
Tilley asked Robinson to take a more expansive review, including potentially throwing out Lee’s order. Tilley said the plaintiffs should have to prove that the state budget is unconstitutionally insufficient before they can proceed with the case.
“It would still do much more damage to the separation of powers now to issue an order ... trying to make appropriations that would cause an unbalanced budget, that would cause a constitutional violation in and of itself,” Tilley said.
This story was originally published April 13, 2022 at 3:37 PM with the headline "Judge hears arguments about whether NC should transfer $795 million to public schools."
