Cooper, Republicans spar over control of millions

They disagree over which branch of government ultimately controls certain types of spending, and Superior Court Judge Henry Hight heard arguments about federal block grants and the millions set to flow from the Volkswagen settlement fund, which was created to end lawsuits tied to the car company's faulty vehicle emissions figures.

Hight said he would rule on those two issues, which account for $183 million in a much broader legal dispute, as soon as Friday.

The Cooper administration argues that it can direct this spending within certain limits. Federal block grants flow to the state with rules on how they can be spent, and the governor argues he and the agencies he oversees are responsible for spending the money within those rules. General Assembly leadership says the money flows through the state treasury, so lawmakers get to appropriate the funds, again within the guardrails laid out by each federal grant.

On the Volkswagen settlement, which will approach $90 million in North Carolina, the General Assembly added language to the state budget requiring the executive branch to submit its plans for legislative approval before any money is spent. Cooper argues this violates the state constitution.

Wednesday's arguments reached back into the 1800s as attorneys talked about previous versions of the state constitution and dueling interpretations of potential legal precedents in other states. At one point, an attorney for state legislative leaders told the judge that all sides agree these funds flow through the state treasury.

Not so, Cooper attorney Jim Phillips said. The governor has agreed these funds are maintained by the state treasurer.

"Not all funds that are maintained by the state treasurer are in the state treasury," Phillips said.