State Politics

Who controls Volkswagen settlement money? NC lawmakers win round in power struggle.

Republican leaders Rep. Tim Moore, Speaker of the N.C. House,  left, and Sen. Phil Berger, President pro tem of the N.C. Senate, win in two rulings on Monday, April 9, 2018, in lawsuits over power struggle with NC Gov. Roy Cooper.
Republican leaders Rep. Tim Moore, Speaker of the N.C. House, left, and Sen. Phil Berger, President pro tem of the N.C. Senate, win in two rulings on Monday, April 9, 2018, in lawsuits over power struggle with NC Gov. Roy Cooper. N&O file photo

Republicans leading the General Assembly won the latest rounds in a protracted power struggle with Democratic Gov. Roy Cooper.

Superior Court judges issued two rulings on Monday bolstering lawmakers' contentions that they have the ultimate control of state purse strings in North Carolina, including the allocation of millions of dollars set to roll into the state from a settlement with Volkswagen.

Judges also ruled that lawmakers can expand the program of Opportunity Scholarships, or school vouchers, even if the governor does not include such a request in his recommended budget. And they ruled the General Assembly can reduce the size of the state Court of Appeals, as was done in 2017 shortly before a Republican on the 15-member bench reached mandatory retirement age.

"Appropriating public funds is such an important responsibility that our constitution gives that authority to 170 of the people’s elected representatives — not to one single politician, whose job is to execute the law rather than attempt to make his own,” Senate leader Phil Berger, a Rockingham County Republican, and House Speaker Tim Moore, a Cleveland County Republican, said in a joint statement. "We are pleased the court stopped some of Gov. Cooper’s latest attempted power grabs and urge him to abandon these self-serving lawsuits."

Ford Porter, a Cooper spokesman, said the governor planned to appeal the rulings.

"This was the first step in the judicial process," Porter said Monday. "We remain confident in the merits of our claims and look forward to having them heard by appellate courts."

Gov. Roy Cooper plans to appeal two rulings issued April 9, 2018, that give the N.C. General Assembly control of distributing millions from a VW settlement and increases spending on vouchers for the next decade. Chris Seward N&O file photo

The legal battle stemmed from several actions taken last year by the General Assembly.

Lawmakers ordered the budget director to increase the governor's spending recommendations for vouchers by $10 million a year over the next decade — public money set aside for families who send their children to private schools. The lawmakers directed the budget director to include the money in future budget proposals so the program, which Cooper does not support, can be built to $134.8 million a year.

In North Carolina, a state where the General Assembly holds great power, the governor recommends but does not dictate what goes in the state spending plan. Cooper's attorneys argued that lawmakers do not have the authority to dictate what a governor includes in a budget proposal. But attorneys for lawmakers countered that the governor should be bound by what lawmakers have adopted in the past.

In the 2-1 ruling, Superior Court Judges Jay Hockenbury of New Hanover County and Nathaniel Poovey of Catawba County sided with lawmakers, saying the provision does not infringe on Cooper's duties. Judge Henry Hight of Vance County dissented from the majority.

He also dissented from Hockenbury and Poovey who ruled that the General Assembly could shrink or expand the Court of Appeals. Cooper argued that by doing so, the lawmakers overstepped their authority and interfered with his ability to appoint replacements to the court in the event of a vacancy.

Hight, on his own, ruled that lawmakers had greater control than Cooper on how to distribute $183 million coming to North Carolina from the Volkswagen settlement in its emissions scandal.

The money is the result of a court-approved settlement between Volkswagen and the federal government over problems on the company’s diesel cars.

In his ruling, Hight noted that all of the money would pass through the state treasury and none could be spent from the treasury without a legislative appropriation.

Cooper argued that his office could direct how the money was spent, within limits. Many federal block grants flow to states with restrictions on how they can be allocated.

Lawmakers argued that it should be the legislative branch, not the executive branch, that appropriates those funds with the same limits.

The power struggle between lawmakers and Cooper began quickly after he won the election in 2016, breaking Republicans' four-year control of both General Assembly chambers and the governor's office during Republican Pat McCrory's single term.