Local News

Garner Suing State Over Withholding Of Funds

Posted September 16, 2002

— Six local governments plan to sue the state over Gov. Mike Easley's decision to withhold millions of dollars from them. The Wake County town of Garner is one of them and more local governments may get on board in the next few days.

The governor is withholding $550 million the state collected on behalf of local governments. Now, some cities and counties are going to court to get it and the the city of Raleigh may join them.

Garner had to raise property taxes after the governor withheld $1.4 million -- about 10 percent of the town's budget. A letter from the governor confirming that cities will not get their payments was the last straw.

Garner joins the city of Valdez, and the counties of Alamance, Cabarrus, Stokes and Caldwell in suing the state.

"Some of the smaller counties and cities are in such dire straits, they can't wait. They're in real financial difficulty," said Gene Boyce, a Raleigh attorney.

Boyce represents the towns and counties suing the state. He believes another 15 or 20 local governments will get on board before he files the lawsuit this week.

The city of Raleigh may also go to court to get more than $8 million it is owed.

"Everyone has tried to reason with the governor, to give us the money he collected on our behalf. Now that he's made it clear we aren't getting the money back, our only recourse is to bring a lawsuit," said Kieran Shanahan, a Raleigh city council member.

Road repairs and park improvements are on hold in Raleigh because of the budget shortfall. A city council committee voted last week to have in-house lawyers file a lawsuit of their own.

"The city council serves the citizens of Raleigh, and the citizens' money has been taken, and we [have to] go get it back," Shanahan said.

A spokesman for the governor's office said that Easley has constitutional authority to withhold that money in the face of a budget emergency.

Boyce has won cases against the state totaling more than $1 billion.


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