Highway Trust Fund Lawsuit Back in Court

Posted January 18, 2008

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— A lawsuit claiming Gov. Mike Easley violated the Constitution returned to court Friday with plaintiffs arguing he illegally transferred $80 million out of the state's Highway Trust fund during the 2001-2002 budget year.

N.C. Highway 540 and other urban beltlines across North Carolina were set in motion nearly 20 years ago when the General Assembly raised certain taxes to form the Highway Trust Fund.

"When you tax us and you tell us why and you got our money, you've got to spend it for what you said you're taxing us for," attorney Gene Boyce said in court.

"And certainly, a trustee can not spend money for its own needs."

Boyce said the sole purpose of the $80 million transfer was to help balance the state's budget. It's a controversial issue now garnering attention from the courthouse to the state house.

During a gubernatorial debate on Thursday, the four Republican candidates each supported new legislation to safeguard the Highway Trust Fund.

Democrat Bev Perdue announced her transportation plan this week, saying if she is elected governor, she proposes to change the rule that allows a transfer of $170 million from the fund each year. Her opponent, Richard Moore, said Perdue's plan would leave a large hole in the state budget.

The judge presiding over the case plans to make his preliminary ruling within the next three weeks on whether the budget transfer was unconstitutional.

The lawsuit was filed nearly five years ago by politicians Jim Harrington, then-secretary of transportation, and Bill Goldston, who initially lobbied to create the fund. Back then, a judge ruled there was no standing basis to file a lawsuit. The ruling was taken to the state Supreme Court, which overturned the judge's ruling.

Many involved expect it will eventually be back in the hands of the state's high court.


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