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Back about eight years ago, then-Gov. Mike Easley used some highway trust fund money to balance what was then a state budget in deficit. Some taxpayers took exception at that (and another related legislative action) and sued to have the court find that the governor can’t raid a fund set aside for a particular purpose in order to balance the general fund budget.

As that case has dragged on, another governor got herself elected and Gov. Bev Perdue found herself with a budget deficit this spring. And she followed her predecessors’ example and raided a bunch of special funds in order to keep the lights on.

But remember that court case?

The Court of Appeals ruled today:

We hold that the Constitution of North Carolina article III, section 5 is a grant of authority to the Governor, which is limited to escrowing or reducing budgeted expenditures and does not create a power to transfer and spend funds appropriated for one purpose to another purpose without statutory authority. We further declare the transfer of $80,000,000 from the Highway Trust Fund to the General Fund in fiscal year 2001-2002 by the Governor exceeded his constitutional authority under N.C. Const. art. III, § 5.

The way I read that, it just got a lot harder for the governor (any governor) to balance the budget. Essentially, this court is saying that the chief executive pretty much has to stick to budget cuts in order to keep the state operating in the black.

There was a dissenting opinion and I imagine the executive branch will exercise its right of appeal.

Click here for a link to the Court of Appeals decision. (PDF)

Here’s the Associated Press' early bulletin on the story:

RALEIGH, N.C. (AP) - North Carolina courts have again weighed in on how far a governor can go to balance the state's budget.

The state Court of Appeals ruled Tuesday former Gov. Mike Easley was wrong to take $80 million from a dedicated road-building fund to reduce the state's operating shortfall eight years ago.

Judge Robert Hunter of Morehead City wrote for the majority that a governor can't transfer money from one fund to another without legislative approval.

Judge Linda McGee argued in a dissenting opinion that such a narrow interpretation of the state constitution would hamstring governors from acting quickly to plug a deficit.

State courts have heard two similar cases recently involving how Easley managed the budget shortfall this decade.

I think I'll wander out to one of Gov. Perdue's press avails today and ask her what she thinks about this.