A split N.C. Court of Appeals panel has ruled (in Goldston v. State) that former Gov. Mike Easley did not have the power to transfer $80 million out of the Highway Trust Fund to pay the state’s general bills in 2001.
Judge Robert N. Hunter’s majority opinion includes the following:
[T]he action of the Governor in transferring $80,000,000 of Trust Fund monies directly into the General Fund without awaiting legislative action is that the transfer does not effect an economy, to wit: it does not reduce spending or diminish the deficit. [Executive Order No. 19] and the action of Secretary Tolson in transferring $80,000,000 fails to effect any economy. In fact, this action was the very antithesis of effecting an economy as it was explicitly intended to support General Fund appropriation expenditures. Ratification for the transfer was not subsequently adopted by the General Assembly.
While the judges ruled against Easley, they did not rule against the General Assembly, which transferred $125 million out of the Highway Trust Fund but later paid the money back.
Judge Barbara Jackson agreed with Hunter in the ruling against Easley. Judge Linda McGee agreed with Hunter and Jackson in upholding the General Assembly’s actions, but McGee dissented from the portion of the ruling dealing with Easley’s actions.
(You might remember that this long-running case returned to the Court of Appeals after the Supreme Court ruled in 2006 that taxpayers had standing to challenge the Highway Trust Fund money transfers.)
