by Joseph Coletti
Senior Fellow, Fiscal Studies, John Locke Foundation
Gov. Roy Cooper yesterday amended his constitutional challenge against the General Assembly to include three additional claims about separation of powers and the budgeting of funds for opportunity scholarships, federal block grants, and settlement funds from Volkswagen.
On the opportunity scholarships, Section 6.6(b) states, “When developing the base budget, as defined by G.S. 143C-1-1, for each fiscal year specified in this subsection, the Director of the Budget shall include the appropriated amount specified in this subsection for that fiscal year.” The base budget is simply the starting point for budgets, so it does not “dictate to the Governor—the director of the State budget—what he must include in the proposed budget he prepares.” He can show the lack of funding as a cut from the base budget in his proposed budget, as he does with other programs. I cautioned against the inclusion of opportunity scholarships in the base budget as a question of policy, that including automatic increases could undermine the fiscal restraints of the base budget. There is no question about the General Assembly’s constitutional authority to direct the governor how to prepare the budget, as it does in the State Budget Act, Chapter 143C of the General Statutes.
The other two arguments ignore the long history of General Assemblies appropriating funds from federal block grants and legal settlements. Earmarking competitive grants to specific organizations is bad policy, but the precedent has been established under Republican and Democratic legislatures and Republican and Democratic governors. In 2007, the General Assembly created a new position in the Department of Health and Human Services that was entirely funded by a federal Family Planning Block Grant. In 2008, the General Assembly appropriated funds from a number of federal block grants to specific purposes. TANF-related block grants have gone to numerous purposes over the years. Established practice does not mean the activity is constitutional or right, but Gov. Cooper has been part of state government for more than 30 years and does not seem to have raised this concern before. Nor did he raise earlier objections to the 2014 law that limited the distribution of funds from state lawsuits without an appropriation from the legislature, even as he complied with the law in recommending how to use proceeds from a 2015 settlement with Standard & Poor’s. Those proceeds were appropriated to the Housing Finance Agency.
Constitutional fights are not necessarily partisan, as the battles between Gov. McCrory and the General Assembly made clear. Bad policy is not necessarily unconstitutional. The General Assembly should not have muddied the definition of “base budget” nor earmarked grants to specific nonprofits. These changes do not, however, dictate how the governor can propose spending money in future budgets, change radically how the state will spend funds from federal grants or legal settlements, or otherwise overstep the constitutional authority of the legislature.