Does the governor of North Carolina have enough authority to adequately manage the state budget during times of severe shortfalls? Two judges of the N.C. Court of Appeals say yes — as long as that authority amounts to cutting spending already authorized by the General Assembly. But the governor cannot transfer funds from special accounts such as the Highway Trust Fund without the express approval of the legislature.
If that view stands up on appeal to the N.C. Supreme Court, it sets up one more potential confrontation between the executive and judicial branches of government over how much power the chief executive ought to have. Dating to Colonial days, the legislature has generally kept the governor on a short leash. It still does, the Court of Appeals ruled in a 2-1 decision.
When Mike Easley became governor in 2001 and the state faced the first of several billion-dollar budget shortfalls, the governor took a number of actions to balance the budget. One of them was transferring $80 million from the Highway Trust Fund to the General Fund.
Two prominent figures, former Transportation Secretary Jim Harrington, a Republican, and former state Sen. Bill Goldston, a Democrat, sued to prevent future governors from transferring money away from a fund meant primarily to fund roads projects.
In an opinion written by Judge Bob Hunter of Greensboro, the court ruled that Easley overstepped constitutional bounds when he transferred money from one fund to another.
The state traditionally “has chosen to employ separate, divided powers to address government,” Hunter wrote. While that may be an inefficient way to administer a budget, “our history and experience with authority cautions us against entrusting unbridled expenditure authority in any one person.”
But another appellate judge, Linda McGee, took issue with Hunter’s opinion. She argued that limiting the governor’s options, and requiring prior legislative approval of transfers, leaves a governor unable to carry out her constitutional duty of avoiding a projected deficit.
These are more than theoretical issues. Given the deep revenue shortfall that faced the state this year, making sure the governor has adequate powers to deal with possible deficits becomes a pressing concern. Legislators must find ways to restore in a major way the state’s rainy day fund as a hedge against future shortfalls. And legislators owe the public a good-faith attempt to restructure a revenue system that clearly is inadequate to meet the needs of the state. Otherwise, legislators can look forward to being called into session at any time to consult with and act on a governor’s plan to deal with a looming deficit. Anyone who thinks that’s a good idea hasn’t been paying attention.