Supreme Court: Easley transfer unconstitutional

The N.C. Supreme Court made some law Friday by deciding not to decide. Or maybe that's by not deciding to decide, letting stand a lower court ruling that says Gov. Mike Easley should not have shifted money from the Highway Trust Fund in 2002, even to help balance the state budget.

The court split 3-3 on the issue after Judge Patricia Timmons-Goodson properly recused herself from the case. She had been on a Court of Appeals panel when it considered a procedural issue affecting the case.  Later the Court of Appeals dealt with the substantive issue whether governors can alter legislative decisions to put money in a specific trust fund -- in this case, the Highway Trust Fund. The Court of Appeals panel ruled 2-1 against it, and the Supreme Court's 3-3 tie leaves the lower court's ruling intact. Thus a two-judge majority on the Court of Appeals decided an important question -- at least for the time being. The ruling does not have precedential value, as an earlier version of this post stated. But lawyers and politicians will argue about the impact regardless of that.

The lawsuit was filed in response to Gov. Mike Easley's using $80 million in Highway Trust Fund money to balance the state budget in 2002. He argued that the constitutional provision directing the governor to manage the state's money gave him the authority to transfer money as needed.

What's interesting is that this does not exactly reflect a political split. After all, many Republicans as well as Democrats in the General Assembly supported the lawsuit and supported the Court of Appeals decision.  If there was any split at all, it was between a legislature that argues its decisions on designated money cannot be overruled by a governor, even when there's a financial emergency, and the executive branch.

Update: There was bipartisan support on both sides. Former Govs. Jim Hunt, a Democrat, and Jim Martin and Jim Holshouser, both Republicans, supported  the theory that the Constitution gives governors the authority to tap special funds in order the balance the budget. 

And it's a big win for the N.C. Institute for Constitutional Law, which represented former state Sen. Bill Goldston and former Secretary of Transportation Jim Harrington in challenging the transfer.

"The Constitution and the People have prevailed. The Court of Appeals decision will stand and government accountability will stand with it,” says the institute's senior staff lawyer, Jeanette Doran. “The People can count on the constitutional mandate that the General Assembly set the budget and the governor administer it as enacted. Voters can count on future governors not raiding special trust funds.”

Here's the court's decision today:

Justice TIMMONS-GOODSON took no part in the consideration or decision of this case. The remaining members of the Court are equally divided, with three members voting to affirm and three members voting to reverse the decision of the Court of Appeals. Accordingly, the decision of the Court of Appeals is left undisturbed and stands without precedential value.