Raleigh, N.C. — Superior Court Judge David Lee on Wednesday ordered state finance executives to move $1.7 billion in unused funds to education agencies, bypassing the North Carolina General Assembly.
The ordered is “stayed” for 30 days, allowing other branches of government to take action consistent with the order, he said.
The funds are part of the more than $5.6 billion-over-eight-years plan to overhaul and increase education funding in the state. That plan stems from the so-called Leandro lawsuit — named for an original plaintiff — first filed against the state in 1994 by families and school boards in five low-wealth counties (Cumberland, Halifax, Hoke, Robeson and Vance). They alleged the school districts couldn’t afford to provide the education they said their children were promised by the North Carolina Constitution.
Lee’s order issued Wednesday mirrors an order proposed by families and school boards in six North Carolina counties — including Charlotte-Mecklenberg Schools — last week. Attorney General Josh Stein responded to the proposal this week by agreeing that the state can fund items without legislative approval.
On Wednesday, Lee said acknowledged that the case’s previous superior court judge, Howard Manning, and the state Supreme Court had given deference to the state, including lawmakers, in coming up with a plan. But he’s expressed frustration with the lack of progress made in the 27-year-old case.
“This case is about children who are from high poverty, low performing districts and areas of our state that aren’t given fair opportunity to get a sound basic education,” he told the court Wednesday. “Unfortunately from the numbers I have seen, the sheer number of those [at-risk] students has increased dramatically and continues to do so. In that sense, it’s a runaway train.”
North Carolina is, by law, charged with funding education, while counties are charged with funding facilities.
The North Carolina House and Senate have declined to fully fund the $1.7 billion required this year and next year under the plan, which Lee approved in June.
It’s the only plan submitted to the court as a proposal to remedy court findings from 2004 and earlier that the state was not adequately funding education as required by the state Constitution.
Legislative leaders called the ruling “a circus” that flouts the state constitution and overturns decades of legal precedent that gives the General Assembly sole control over how the state spends money.
“This case has devolved into an attempt by politically allied lawyers and the Governor to enact the Governor’s preferred budget plan via court order, cutting out the legislature from its proper and constitutional role,” Senate President Pro tem Phil Berger and House Speaker Tim Moore said in a joint statement. “Thankfully, executive branch officials swear an oath to the Constitution, not to an unelected county-level trial judge. A judge does not have the legal or constitutional authority to order a withdrawal from the state’s General Fund.”
Lee has ordered the Office of State Budget and Management, the current State Budget Director, the Office of the State Controller, the current State Comptroller, the Office of the State Treasurer and the current State Treasurer to transfer $1.7 billion out of unappropriated general revenue and into the pockets of three state entities.
That money includes $1.5 billion to the North Carolina Department of Public Instruction, $189.8 million to the North Carolina Department of Health and Human Services and $41.3 million to the University of North Carolina System.
Advocates for the “Leandro plan” and attorneys said after the hearing they considered Lee’s order to be a victory — but one that could be short-lived.
The state can appeal the order, they noted. And the order only funds two of the remaining seven years of the plan and does not trickle into the years afterward, when some expenditures are intended to remain permanent.
Several noted the years that have already passed since the 2004 state Supreme Court order affirming that the state must provide a “sound basic education.”
“Seventeen years have gone by,” Charlotte-Mecklenberg NAACP President Corine Mack said. “Imagine the Black, brown and indigenous children — children who are ‘at risk,’ children who have been hurt because they didn’t put the money where it needs to go.”
What the state Constitution says
Republican lawmakers have derided Lee’s desire to force the plan to be funded. They argue the North Carolina Constitution provides only the General Assembly with the authority to determine how money should be spent.
Article V, Section 7, of the state Constitution declares, “No money shall be drawn from the State treasury but in consequence of appropriations made by law.”
But Lee said Tuesday that lawmakers’ authority is derived from their role as elected representatives of North Carolinians. Lee considers the state Constitution to be the “supreme law of the land,” approved by voters. That effectively makes it law, he argued.
“The Constitution reflects the direct will of the people,” Lee said.
Voters approved the state’s current Constitution — the fourth edition — in 1970.
The promise to provide education is contained in Article I, which lists 37 rights of North Carolinians. The 15th right listed is access to education. It reads, simply, “The people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right.”
The term “sound basic education” — often used in court and conversations around the Leandro case — comes from North Carolina Supreme Court justices. In a 1997 decision in the case, they used the term to describe the quality of education the justices believed the Constitution had promised. That meant, according to the justices, students should have fundamental skills and knowledge that allow them to function in society, make informed decisions and compete for jobs or post-secondary education.
Former Leandro judge: Judiciary can’t enforce a judgment against other branches of government
Retired Wake County Superior Court Judge Howard Manning, who presided over the Leandro lawsuit for two decades, expressed his dismay this week that Lee planned to attempt to force another branch of government to comply with court rulings.
Manning himself had ordered the state to remedy its shortcomings on education funding. He held periodic progress hearings after the 2004 state Supreme Court ruling. In 2015, his last year presiding over the case before retiring for health reasons, he found that the state was still not complying with court orders.
On Tuesday, Manning sent a memo to lawmakers, Gov. Roy Cooper, Stein and state Superintendent Catherine Truitt in which he cited other court decisions that found the judicial branch’s authority has limits when it comes to the executive and legislative branches of government.
Still, Manning believes the state continues to fall short in meeting its obligations under the state Constitution and subsequent court orders.
Manning, as a judge, ordered the state to focus on having high-quality educators as a means of complying with the state Constitution.
“Leandro requires that the children, not the educational establishment, have the Constitutional right to the equal opportunity to obtain a sound, basic education,” his Tuesday memo reads. “This has not and is not happening now as the little children are not being taught to read and write because of a failure in classroom instruction as required by Leandro.”
He lamented the amount of money being spent on salaries and benefits for employees. About 80% of state, federal and local education spending ($14 billion) goes toward salaries and benefits. That doesn’t include capital spending, which was $2 billion in fiscal 2020.
What the $1.7 billion is for
The Leandro plan’s main goals are to ensure high quality teachers are in every classroom, high quality principals are in every school and more North Carolina children have access to pre-kindergarten. Within the plan are numerous suggestions for adding or changing laws and policies, such as removing the cap on funding to educate children with disabilities.
Lee’s order concerns only the second and third years of the plan, when funding increases are smaller than in later years. These years also don’t yet include pay raises for school employees that will be determined by a study of competitive pay across states.
Cooper and lawmakers have proposed some pay increases included in these two years of the Leandro plan, as well as some pay increases for educators and school staff separate from the plan.
Cooper’s proposed budget for this year and next includes the funding required in the plan. Big ticket items in that proposal include:
- $586 million for principal and assistant principal pay raises
- $150 million toward the final two years of a teacher enhancement program
- $120 million to begin hiring enough student support personnel (such as counselors, nurses and psychologists) to meet national recommendations
- $110 million toward increased special education funding that would coincide with a removal of the cap on how much funding schools can receive for special education services
- $105 million in increased funding for disadvantaged and “at risk” students
- $60 million in additional funding for low-wealth counties
- $50 million to have one teacher assistant for every 27 students in kindergarten through third grade
The House proposal includes about $615 million of the plan. That includes:
- $400 million toward principal and assistant principal pay raises
- $150 million for teacher enhancement
The Senate proposal to fund the plan tops $235 million. It includes:
- $150 million for teacher enhancement
- $48 million toward principal and assistant principal pay raises
All three proposals include some other funding. Both the House and Senate include provisions to decrease funding for child care subsidies and subsidy improvements by $11.3 million.
The eight-year Leandro plan implements suggestions developed by an outside consultant and two other contractors and published in December 2019. It outlines seven goals, under which all line items are categorized:
- Developing, recruiting and retaining teachers
- Developing, recruiting and retaining principals
- “adequate, equitable, and predictable” funding and resources to schools
- Student performance and accountability that meets a “sound basic education”
- Creating an assistance and turnaround system for low-performing schools
- Improving and expanding early childhood education and pre-kindergarten
- Aligning high school and postsecondary and career expectations and opportunities
CLARIFICATION: A previous version of this article said state finance executives had 30 days to act. The ordered is “stayed” for 30 days, allowing other branches of government to take action consistent with the order.