Education wins again

By: - July 7, 2005 5:00 am

Charlotte Observer
N.C. Supreme Court makes it clear: Fines go to schools

To the N.C. Supreme Court, the question didn’t seem difficult. When the N.C. Constitution says "the clear proceeds of all penalties and forfeitures and of all fines collected" for any breach of state law must be used "exclusively for maintaining free public schools," it means just that.

Criminal fines of about $40 million a year already go to the schools, but until now courts hadn’t clearly established whether the civil penalties must as well. The answer is "yes," the Supreme Court ruled, so civil fines such as some parking tickets, late fees on taxes and other penalties must be funneled into the public schools. "We’re conceivably looking at $500 million," said Ed Dunlap, executive director of the N.C. School Boards Association, one of the parties that sued on behalf of the schools.

Most folks may have thought the Constitution was already clear enough. But over the years, state agencies found creative ways to use portions of the funds collected in fines, penalties and forfeitures. The Department of Environment and Natural Resources, for example, sometimes arranged settlements of environmental fines that included mitigation projects. The Department of Revenue didn’t send fines and interest from late income tax filers to the schools fund. And on and on. Some agencies argued that penalties paid to the state to compensate it for injury, damage or loss did not have to go to the schools fund.

In a 6-0 opinion written by Justice Sarah Parker of Charlotte, the court said they were wrong. Penalties for breaches of law are meant to be punitive, not remedial, and the money must go to the schools regardless of whether the legislature calls it "a penalty, forfeiture or fine or whether the proceeding is civil or criminal."

The court noted some exceptions. For example, the University of North Carolina system must send fines from parking tickets — but not fines for overdue library books — to the schools.

The Supreme Court’s welcome decision clears up considerable confusion about the constitutional provision. But it also raises the possibility of more financial upheaval when lawmakers decide how to spend the state’s available revenue. The government agencies that had relied on the funds will now find a gap in their budgets.

There’s a risk, of course, that the schools’ windfall may be vanish in the budget process. Lawmakers should put schools first and resist the temptation to cut education spending elsewhere. Joe White, the Charlotte-Mecklenburg school board chairman, was appropriately realistic: "Until I see it in my hand, I’m not going to get excited."

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Chris Fitzsimon

Chris Fitzsimon, Founder and Executive Director of N.C. Policy Watch, writes the Fitzsimon File, delivers a radio commentary broadcast on WRAL-FM and hosts "News and Views," a weekly radio news magazine that airs on multiple stations across North Carolina. [email protected] 919-861-2066