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Governor possesses big budget power

RALEIGH — North Carolina’s high court recently wrestled without conclusion about where the budgetary powers of the state legislature stop and those of the governor begin.

To Joe and Jane Taxpayer, it might seem like an inconsequential argument. Government — federal, state and local — taxes your earnings and financial transactions. Does it matter which branch of government decides how it is spent?

Well, it might when government faces the rough economic times that surely lie ahead.

How those decisions are made, and who makes them, could determine state employee layoffs, pay cuts or even the closing of state parks, museums and like.

To try to keep government running as smoothly as possible during the tough times, the writers of the state constitution gave the governor power to rearrange state spending when deficits loom.

Lately, some folks have tried to discount that power as a minor, little thing that lets the governor cancel an order for pens over here or postpone a trip over there.

Hardly. The constitution lists the governor’s budgetary powers third among duties, ahead of those for executing the laws of the state and for granting pardons to convicted criminals. The bulk of the constitutional provision establishing the governor’s budgetary powers deals with the issue coping with a budget shortfall.

The provision gives the governor the power to “effect the necessary economies in state expenditures” when tax collections aren’t sufficient to meet the spending laid out in the state budget approved by legislators.

The court case in question addressed whether former Gov. Mike Easley should have moved money from a highway fund to help close a budget shortfall in 2002.

A 3-3 decision by the state Supreme Court (one justice recused herself) left intact a lower court ruling saying the money shouldn’t have been moved. The legal draw means that the ruling creates no precedent, so Gov. Beverly Perdue could do the same thing with impunity the next time a shortfall arises.

The legal argument made against another grab of the highway money is that it doesn’t really constitute a “necessary economy,” a spending cut.

Actually, it does. It’s a reduction of highway money. And as I’ve previously pointed out in this column, the state constitution makes no distinction between highway funds and the state’s general fund. It refers only to “the budget.”

What complicates the case isn’t whether taking highway money amounts to a cut. Rather, it’s a competing constitutional provision that states that no tax created and dedicated for one purpose can be used for another.

A broad interpretation of the constitution would mean that the governor’s budgetary powers supercede that restriction in times of budget shortfalls; a narrow interpretation means it doesn’t.

If the narrow interpretation eventually prevails, the result will likely be inflexibility that could cause state government to delay paying its bill and meeting its financial obligations.

You might be fine with that, unless you’re the one owed.

Scott Mooneyham writes about North Carolina politics for the Capitol Press Association.

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