by CLC staff
On February 22, the North Carolina Supreme Court heard oral arguments in the latest round of litigation in the so-called Leandro case. At issue is whether an unelected trial court judge has the authority to force taxpayers to spend billions of dollars without the consent of our elected representatives in the General Assembly.
Our State Constitution gives the legislature the “power of the purse” in Article V, Section 7, which says that “no money shall be drawn from the State treasury but in consequence of appropriations made by law.” Making law, of course, is the sole purview of the General Assembly — and given its members’ two-year terms, the branch of state government most responsive and accountable to the people.
Background
The tangled roots of Leandro run 30 years deep. In May of 1994, five families — including the lead plaintiff, the mother of eighth-grader Robb Leandro — sued the state for denying their children the right to an adequate education by insufficiently funding their rural, mostly minority-majority school districts. [Editor’s note: technically the case was known as “Hoke County Board of Education, et al. v. State of North Carolina, et al.” and the other plaintiffs in question were the school districts in Halifax, Robeson, Vance, and Cumberland Counties.]
The crux of the plaintiffs’ case centered on two provisions of the State Constitution: Article I, Section 15, which says that “The people have a right to the privilege of education, and it is the duty of the State to guard and maintain that right” and Article IX, Section 2.1, which says that “The General Assembly shall provide by taxation and otherwise for a general and uniform system of free public schools, which shall be maintained at least nine months in every year, and wherein equal opportunities shall be provided for all students.” They argued that the children in their poor school districts were not being provided with educational opportunities equal to those of children in wealthier districts, for example, Wake County.
After three years of legal wrangling, including a motion from the state to dismiss the case, a denial of that motion, an appeal of the denial, and a dismissal of the case by the Court of Appeals, the state Supreme Court partially overturned the Appeals Court, allowing Leandro to proceed to trial.
A Sound Basic Education
In its unanimous 1997 decision, the state’s highest court said that in their interpretation of the State Constitution, students were guaranteed the opportunity to receive a “sound basic education.” They defined this phrase to mean:
- A “sufficient ability to read, write, and speak the English language”
- A sufficient ability to do math and science at a level that “enables the student to function in a complex and rapidly changing society”
- A sufficient “fundamental knowledge of geography, history, basic economic and political systems to enable the student to make informed choices with regard to issues that affect the student personally or affect the student’s community, state, and nation”
- “Sufficient academic and vocational skills to enable the student to successfully engage in post-secondary education or vocational training,” and
- “Sufficient academic and vocational skills to enable the student to compete on an equal basis with others in further formal education or gainful employment in contemporary society.”
They rejected (with one dissent) the equal funding arguments made by the plaintiffs, however. Because the State Constitution also provided for supplemental education funding by county and municipal governments, the high court said, it “does not require that equal educational opportunities be afforded students in all of the school districts of the state.” In North Carolina, K-12 education is funded by three sources: federal dollars (currently at 20.2%), state dollars (58%), and local dollars (21.8%). Local governments are authorized to spend local revenue — typically property taxes — by Article IX, Section 2.2 of the State Constitution.
In 1997, the State Supreme Court comprised five Democrats: Chief Justice Burley Mitchell and Associate Justices Henry Frye, Sarah Parker, John Webb, and Willis Whichard; and the first two Republicans ever elected in the high court’s history: Associate Justices Beverly Lake and Robert Orr (who provided the lone dissent). Democrats also controlled the General Assembly for all but two of the next 16 years and for a century before that.
A Long and Winding Road
So for the next 25 years — including the initial 14-month trial, a 400-page decision by Superior Court Judge Howard Manning (who retired in 2016), endless motions and appeals, two deaths, and additional plaintiffs being added to the suit (you’ll hear the term “intervenors” when you watch the proceedings below) — the now congested case meandered through the legal system. It even reached the State Supreme Court twice: in 2004 (Leandro II) and in 2013 (Leandro III).
And in that time — despite its name — Leandro no longer involved any of the original plaintiffs. All the children grew up, of course, including Robb Leandro: he ended up graduating from Duke and Vanderbilt. For the last 18 years has been a successful attorney in Raleigh.
It’s All About the Benjamins
In 2018, the new trial court judge, David Lee, commissioned a left-wing research firm from San Francisco to come up with recommendations as to how the state could meet the mandate of Leandro to provide children with a sound basic education. In December 2019, they released a 300-page Comprehensive Remedial Plan which said that the state needed to spend an additional $6.8 billion over eight years to address perceived inequities in all 100 of North Carolina’s counties.
A spokesman for Senate President Pro Tempore Phil Berger took issue with the report, saying that money was not necessarily a predictor of success. “Money doesn’t buy outcomes,” said Pat Ryan in a statement. “New York spends more per student than any state in the country — two-and-a-half times as much as North Carolina — and their scores are still lower than North Carolina’s.”
The General Assembly “has increased education spending by a total of nearly $10 billion over the previous eight years,” he continued. “The per-pupil expenditure is currently $10,500 per student, and this year’s budget spends more than $10 billion on K-12 education. North Carolina already spends a higher share of its revenue on schools than 33 other states and we provide more funding to poor school districts than to wealthy ones.”
For some perspective, North Carolina’s K-12 public education expenditure in Fiscal Year 1993-1994 was approximately $4 billion; this fiscal year (FY 2023-2024), the K-12 public education expenditure is $11.6 billion. 94% of that is spent on salaries and benefits.
Judge Manning, who presided over Leandro for 19 years, seemed to agree with Ryan’s assessment. In October 2020 he penned an op-ed for the Raleigh News & Observer saying that he believed the failure to provide a sound basic education was not a question of more money, but instead a lack of competent management and effective teachers.
Here Comes the Judge
In June 2021, Judge Lee disagreed and decided that the State should implement the Comprehensive Remedial Plan for the entire state. On November 10, 2021, he ordered the State Controller, the State’s chief fiscal officer, to transfer $1.75 billion to implement the first two years of the report’s recommendations. Astonishingly, he reasoned, children’s access to a sound basic education superseded any law that says the power to appropriate money lies with the legislature.
That didn’t sit well with the General Assembly’s conservative leaders.
“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,” said Berger and House Speaker Tim Moore in a joint statement. “If Judge Lee’s orders are followed, the legislature’s core duty is usurped by an unelected county-level trial judge and an out-of-state consultancy funded by the Governor and his political allies.”
It also didn’t sit well with Judge Manning. The same day, he sent a memorandum to the General Assembly, the Governor, the Attorney General, and the Superintendent of Public Instruction that laid out the case that the courts lacked the authority to force the state to spend taxpayer money.
“At the present time, there is a media-induced frenzy about the Leandro judge proposing to enter an order requiring the General Assembly to appropriate over $1 billion for the educational establishment,” he said in the memo. “As the press is licking its lips for 15 minutes on the 6:00 news, I will refer all to the following decisions from our Supreme Court and other decisions relating specifically to the power of the Judicial Branch.”
He cited Smith v. State, 289 NC 303 (1976), which involved the concept of sovereign immunity, which said “Pursuant to Smith, we do not believe the Judicial Branch of our State government has the power to enforce an execution against the Executive Branch.”
Manning went on to reiterate his belief that more money wasn’t the key to getting better results. “Reduced to essentials, in my opinion, the children are not being provided the opportunity because after all the millions spent, 90% of school costs are for adult salaries and benefits, and the data shows as it did years ago and up to now the educational establishment has not produced results.”
[Editor’s note: here is the current state per-pupil funding for the plaintiff counties and how they now compare to Wake County, according to Best NC: Wake County, $6,898; Hoke County, $8,286 (+20% compared to Wake); Halifax County, $10,935 (+59% compared to Wake); Robeson County, $8,594 (+25% compared to Wake); Vance County, $9,484 (+37% compared to Wake); and Cumberland County, $7,478 (+8% compared to Wake). Each of the counties also has higher total per-pupil funding (local, state, and federal) than Wake County. Thank you to the Carolina Partnership for Reform for the updated numbers.]
Out of Control
The Controller at the time, Linda Combs, asked the Appeals Court to block the order, contending that it would be illegal to transfer any funds without the approval of the General Assembly. Her successor, Nels Roseland (Combs died from an aneurysm on October 19, 2023) took the same position, saying that “it would be fundamentally unfair for a court to subject him, his staff, and the recipient agency staff to criminal and civil liability.”
Later that November, the Court of Appeals agreed with Combs, issuing a ruling that blocked the trial court from enforcing the $1.75 billion transfer.
A Kangaroo Court
In 2022, the state Supreme Court comprised four liberals: Associate Justices Anita Earls, Sam Ervin IV, Robin Hudson, and Mike Morgan; and three conservatives: Chief Justice Paul Newby, Tamara Barringer, and Phil Berger, Jr. In August, they heard the case for the fourth time. In a 4-3 party-line ruling announced the Friday before the 2022 General Election (and a month after Judge Lee died of cancer) they upheld Judge Lee’s order that forced the state to transfer the money to pay for years two and three of the Comprehensive Remedial Plan — without the consent of the legislature. It was an unprecedented and political disregard for the State Constitution’s separation of powers, which lies at the heart of the minority’s clear and powerful dissent.
Yet Justice Ervin, the deciding vote in Leandro IV, seemed to be at odds with his own earlier reasoning. Writing for the majority in Cooper III v. Berger just two years before, Ervin quoted the constitutional provision cited at the beginning of this article: “The appropriations clause of the North Carolina State Constitution provides that no money shall be drawn from the State treasury but in consequence of appropriations made by law… In light of this constitutional provision, the power of the purse is the exclusive prerogative of the General Assembly.”
And the last-minute timing was no accident. Just four days later, on November 8, North Carolina’s voters put conservatives back in control of the court with decisive wins at the ballot box. The court now comprises five conservatives: Chief Justice Paul Newby and Associate Justices Trey Allen, Tamara Barringer, Phil Berger, Jr., and Richard Dietz; and two liberals: Anita Earls and Allison Riggs. [Editor’s note: Riggs is the only Justice on 2024’s general election ballot. She will face Jefferson Griffin in the fall.]
The Beat of a Different Drum
This is where things get interesting. On October 20 of last year, the new Supreme Court agreed to hear an appeal on February 22 from President Pro Tem Berger and Speaker Moore (Leandro V). They argued that the trial court lacked subject matter jurisdiction (basically the legal authority) to extend the remedial plan beyond the five original school districts that first sued the state back in 1994. They also rejected the trial court’s two-year order to pony up the $1.75 billion (now $677 million, as adjusted by the court to reflect education appropriations made by the General Assembly in its regular budget process).
Naturally, the left lost its marbles; it looked like its Leandro sacred cow might be headed for the butcher block. After all, it wouldn’t be the first time the conservative Supremes corrected the tortured-logic decisions of their progressive predecessors. Among the new court’s decisions: they upheld North Carolina’s Voter ID law, removed the court from the partisan gerrymandering debate, and restored the ban on felons from voting.
Governor Cooper issued an angry press release on the day of the hearing with the ironically titled “Governor Cooper Statement on North Carolina Supreme Court Unprecedented Rehearing of Leandro v. North Carolina.”
Anita Couple of Bergers and Two Large Cloaks
If you’ve made it this far, you’ll have probably noticed that there seems to be more than one Berger on the Leandro menu. Associate Justice Phil Berger, Jr. is the son of Senate President Pro Tem Phil Berger, and the plaintiffs in Leandro V demanded he recuse himself because his father is a party to the case.
The Supreme Court’s rules handle issues of recusal (typically for conflicts of interest) in one of two ways: 1) justices can decide for themselves whether to voluntarily recuse themselves or b) they can ask their colleagues to vote on the issue at the full court. “Erring on the side of prudence,” Berger Junior chose the second option and prevailed; the high court voted 4-2 that he did not need to recuse himself.
Not to be outdone, the senior Berger and Speaker Moore asked for the recusal of Justice Anita Earls, one of the two liberals on the bench, because she had been an attorney for one of the plaintiffs in the early stages of Leandro. Justice Earls chose the first option and refused to recuse herself. [Editor’s note: Mitch Kokai at Carolina Journal has some great reporting on this twist.]
Take it From the Top
All that drama brings us back to where we started, the 80-minute hearing at the North Carolina Supreme Court on February 22.
Matthew Tilley, the lawyer for Senate leader Berger and Speaker Moore, was the first to speak. “This is not a contest between those who want to fund education and those who don’t,” he said. “It’s also not a case about whether or not our Constitution guarantees every child in the state an opportunity to obtain a sound basic education. That right was granted in Leandro.”
“Instead, the case is about whether the trial court, when presented with only district-specific claims, had jurisdiction to issue a sweeping statewide order or statewide orders that required the comprehensive remedial plan, a plan which dictates virtually every aspect of education policy and funding, not just for the districts that were plaintiffs, but for all 115 school districts across the state, effectively removing those decisions from the political and the democratic process.”
A decision is expected in the next few months.
Photo above: The Justice Building in Raleigh. The North Carolina Supreme Court presides in the Justice Building’s third floor walnut-paneled courtroom.
