Schools' windfall may be a bust

Legislators say there's no money to pay the $747 million from civil fines a judge says is due public schools

RALEIGH -- Legislative leaders said Tuesday there's not enough extra cash on hand to pay $747.9 million a Wake County judge says must go to North Carolina public schools. As a result, the legal victory that caps a decade-old court battle may result in schools getting no new money after all.

Wake County Superior Court Judge Howard Manning Jr. has ordered the state to turn over civil fines that were illegally withheld from public schools for more than nine years. In the order issued Friday, Manning left it to the General Assembly to decide where to come up with the money and over what period.

It's shaping up as a pyrrhic victory. Instead of coming up with an infusion of fresh revenue, legislators say they'll comply with Manning's order by tapping money already earmarked for K-12 education.

"Everybody assumed from the beginning that it would come out of the state's education budget," State House Speaker Joe Hackney, a Chapel Hill Democrat, said Tuesday. "We really don't have $700 million in new money."

Senate Majority Leader Tony Rand, a Fayetteville Democrat, said it's too soon to say just how much of the money that Manning awarded to public schools would come from existing education money. He also warned that the state's sour economy means there isn't much extra money.

A spokesman for Gov. Mike Easley's office said the court order was an issue for the General Assembly.

This is not the reaction the state's public school officials wanted to hear.

"I hope they don't choose to go that route," said Leanne Winner, lobbyist for the N.C. School Boards Association, one of the groups that sued the state. "It's money they should have been giving to the schools all along."

Winner said she hopes the school groups can negotiate with legislators to stretch an infusion of new money across several years.

Judge sought accord

Manning had delayed issuing the court order in the hope that both sides could reach a settlement. He noted that the school districts had offered to settle for a smaller amount.

With no resolution in sight, Manning said, he had to issue the court order. He stressed that he has no authority to tell the state how to come up with the money.

"The remaining chapter in this case, at least at this point, is in the hands of the General Assembly," Manning wrote in his court order.

Manning ordered that the money be used for technology needs, such as new computers.

The money will be given to school districts based on their student enrollment. As the state's largest school district, Wake County could get $70 million from the court order.

Suit dates to 1998

The Wake, Durham and Johnston school systems had joined three other districts and the N.C. School Boards Association in a 1998 lawsuit against the state. They contended that, under the state constitution, all civil fines and penalties paid to state agencies must be given to primary and secondary schools.

Criminal fines already must be turned over to schools.

A 2005 state Supreme Court ruling expanded the types of civil fines that had to be turned over to schools, including penalties levied for not paying state taxes, fines paid by overweight trucks and parking tickets issued at state universities.

The high court sent the case to Wake Superior Court to determine how much schools should get. Manning said fines collected between Jan. 1, 1996, and June 30, 2005, must be turned over to the school districts.

But it may gain the school districts very little in the end.

"I never could understand why they chose to go to court," Hackney said.