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.

House Speaker Joe Hackney just sent out this statement: "After consultation with Sen. Basnight and with various members of the House of Representatives, we have agreed that the expense and time required for a veto session are not justified in this case. The issues addressed in House Bill 104 are not urgent and we can discuss the concerns of Gov. Perdue during the short session."

Unsaid is how they'll dismiss the veto session. They could show up for a skeleton session, gavelling in and out without taking action. Only a handful of members would need to show up from either chamber for that. Or they could gather petitions from enough members saying that they don't feel the need to return to Raleigh.

Either way, it appears lawmakers are handing Gov. Bev Perdue a win on this one.

Background here.

Gov. Bev Perdue has vetoed House Bill 104, "AN ACT TO CLARIFY LEGISLATIVE CONFIDENTIALITY."

Update: Click here for my full story.

Among other things, the measure would put certain public records from the executive branch out of public view if they were requested by staffers at the state legislature.

More to come.

Update: “I believe everything we can make public belongs to the people,” Perdue told reporters Wednesday afternoon. “It’s the public’s documents. And this bill just reall goes in and erodes our commitment to transparency.”

Update: Perdue says she will likely call the special veto session for Sept. 18. Rep. Hugh Holliman, the House majority leader, says his caucus has not discussed whether to come back or not.

Update: The governor's veto message and related documents are online. Click here for those.

Update: H 104 passed the House and Senate without a "no" vote. It only takes three-fifths to over-ride a veto. The question is whether the honorables will want to come back to town to over-ride a veto on this kind of bill.

Update: Click below for the audio of Gov. Bev Perdue talking to reporters about this veto.

• Gov. Bev Perdue talked to the first meeting of her Economic Development Board this morning. She did not stop to chat with reporters about potential vetoes (click here) but has scheduled a tentative presser with reporters this afternoon to talk about unfinished business from the legislative session.
   
• In chatting up her new economic development board (which includes a cast of thousands – the list is at this link) Perdue said she wanted an economic development plan from them by Jan. 31. “Every decision that I make, every call I make, is going to be prefaced with the work I’m asking you to do,” Perdue sai

  She also suggested a new marketing slogan for the state: “North Carolina: The State of Innovation." I’m not sure how serious she was about that one – it sounded like she was leaving it to the board to decide whether that might be a good marketing ploy.

  In more serious business, Perdue charged the board with breaking down barries between the state's various economic development assets. And she talked about her planned trip to China this fall, saying it was necessary for state leaders to go where there are companies that might want to do business here and recruit them.
   

• A New York Times article reported this morning: “Casinos and lotteries in most states are reporting a downturn in revenue for the first time, resulting in a drop in the money collected by state and local governments, according to new state data.” I’m not sure what that might mean for video sweepstakes that are popping up here in the state. Click here for the Times' piece.
   
• Speaking of video sweepstakes, Rep. Melanie Wade Goodwin says she won’t seek a fourth term from her Richmond County-based seat. Goodwin has been one of the chief opponents of video poker and all its forms down here at the General Assembly.
   
• Wake County Rep. Ty Harrell is facing both board of elections and ethics inquiries over his used of campaign funds. Click here for the WRAL story.
   
• Sec. of State Elaine Marshall has formed an exploratory committee to run for U.S. Senate. She would be in a Democrat primary to challenge incumbent Richard Burr. I have more thoughts on this race than I want to cover in this post, right at the moment. (Politico)
   
• A good but sad read from the DesMoines Register: “A massive backlog of unresolved disability claims at the Social Security Administration has kept Lindberg and millions of others waiting years for benefits they earned while in the work force. The delays have led to splintered families, foreclosed homes and suicides.” (Click here for that story.)
   
• President Obama did not give a shout out to the Greensboro family mentioned in this blog post, but they were sitting in the box with the first lady for Wednesday night’s health care speech. Click here for the story from my colleage Dioni Wise.
   
• Speaking of the speech, reaction was typical. Sen. Kay Hagan, a Democrat, said  “I agree with President Obama that our country needs health care reform that stabilizes costs and provides security to our families. A medical condition should never cause a family to declare bankruptcy.” She offered up audio of her full remarks at this link.

  Sen. Richard Burr, a Republican, was both complimentary and cautious about the president’s speech: “I applaud the president’s call for action on health care reform, and agree that we must do something. Whatever we do, however, we must get it right.   Any plan we consider must promote wellness, prevention, and chronic disease management while expanding access to quality care for all Americans. Further, any health care reform legislation must be financially sustainable over the long term. Recently, I have heard from many North Carolinians who are adamant that health care reform not be rushed through Congress. I am hopeful that my colleagues will realize the need to pass responsible health care reform on a bipartisan basis, not just push legislation through without proper debate and consideration of the consequences for all Americans.”

• We are reliably informed he will mention Nathan Wilkes, who went to high school and college in Greensboro. His mom still lives in the area. In addition to being an assembly candidate, Wilkes is the father of three children, one of who was born with hemophilia. In the video linked here, Wilkes tells the story of how treatments for his child not only drove up his own health insurance costs but costs for his entire company. Update: The White House's own site says Wilkes will be mentioned. Click here for that.
   
• The Washington Post got a preview of the speech from administration officials and said that the president will come out in favor of a public option plan as part of the overall reform effort. "Obama intends to reiterate his preference that any final bill include a government-run insurance plan," the Post reported.
   
• Sen. Kay Hagan said this morning she was hoping to hear about specifics about how the president wanted health reform to go and how he would pay for it. “I'm interested in seeing how he wants it to be funded,” she said on a conference call with reporters. "I want to hear some of the specifics that we would like to see in health care reform."
   
• As my boss reports, you’ll be able to see the speech, just not on some of the local affiliates of national networks in Greensboro.
   
• Americans for Prosperity will be organizing some push-back at the state fairgrounds tonight. Click here for info on that.
   

Gov. Bev Perdue has five bills left on her desk from this year’s legislative session.

• S133: Register of Deeds Pensions. This never struck me as a controversial bill. As I read it, the bill helps the pensions of Register of Deeds sync up better with the state pension plan, but I could be wrong.

  Reason to veto: I don't see one right off the bat, unless there's a money issue that's not obvious.
   

• H 1329: Consolidate Expunction Statutes.  The bill, among other things, would make someone eligible to have their record expunged if they were 18-years-old at the time of the crime they committed rather than 18-years-old when they were convicted. It also allows for the expunction of misdemeanor larceny. There were many who said this bill would allow people to have items removed from their records who ought not to be able to do so.

  Reason to veto:  It's possible the governor might want to bolster her cred with the law and order crowd. But that cred would come with a price: hacking off progressives in kind of a large way. Also, of the five bills left, this bill was the most controversial when it passed through the House and Senate, passing by much narrower than typical margins.
   

• H 945: Studies Act: Generally this is an internal bill that lets lawmakers study all manner of potential legislation between adjournment of the long session in an odd numbered year and the short session in an even numbered year.

  Reason to veto: Even if there was a bat-snot-crazy study in there, I can’t see the percentage in vetoing a bill like that since it really wouldn’t make anything law. The one thing a veto here might accomplish would be making lawmakers angry.

• H 836: Modify Appropriations Act: This bill tweaks the $19 billion state budget that passed this summer. The bill actually increases spending a bit by doing a few things, including allowing mental health agencies to hang onto some of their fund balance.

  Reasons for vetoing this one: some technical glitch that the governor doesn’t want to allow to go into law; an (albeit unlikely) bid to force the honorables to reconsider something else in the budget; unhappiness with the extra spending.
   

• H 104: Clarify Legislative Confidentiality: I hadn’t paid much attention to this one, but it would make legislative drafting all that much more obtuse. Already, the General Assembly exempts itself form public records statutes that other governments would have to follow. But this would make it harder to figure out where bills came from. Under the bill, requests to state agencies for information that would help in drafting a bill would become confidential.

  Reason for vetoing this one: This measure conflicts with the idea of making government more open and transparent, something that Perdue ran on. Also, it puts members of the executive branch under threat of a penalty to protect legislative confidentiality. 

Place your bets ladies and gentlemen. We have about 37 hours before these laws would go into effect even if the governor doesn't sign them.