School Law Bulletin #2005/11

In the year 2015 a writer summarizing the past decade of North Carolina public school funding would almost cer- tainly reference the summer of 2005 as memorable—even revolutionary. Not only did the General Assembly approve a long-contested education lottery, but a landmark deci- sion in North Carolina School Boards Association v. Moore resulted in a $120-million budget allocation to the public schools from the state’s Civil Penalty and Forfeiture Fund. While the media and elected officials were devoting their attention to the potential impact of an education lottery, many local government officials were trying to determine what effect the state supreme court’s ruling would have
on local budgets. The decision not only required that pen- alties collected by specific state agencies be allocated to public schools in accordance with Article IX, Section 7 of the North Carolina Constitution, it also created standards to help determine whether the constitutional provision requires other monetary payments collected at the local level pursuant to state law to be remitted to public schools.

This article discusses the constitutional provision at issue in North Carolina School Boards Association v. Moore (NC School Boards) and the precedent that guided the supreme court’s analysis. It also examines the procedural history of the case as well as the implications of the court’s decision. Finally, the article addresses whether the clear proceeds of certain penalties imposed by local governments pursuant to the Machinery Act are also allocable to public schools under the Article IX, Section 7 provisions.