North Carolina judge strikes down vouchers

March 6

On February 17, a North Carolina state trial judge, Robert Hobgood, struck down North Carolina’s Opportunity Scholarships program (i.e. school vouchers) as violating the North Carolina Constitution. (I say “struck down”, but really what he did was grant a preliminary injunction against the program. Whether it ends up being struck down or not is a matter for further litigation, but granting an injunction does require that you establish a likelihood of success on the merits.) The Institute for Justice, a libertarian public-interest group that I’ve worked with, participated in the case on the side of the parents supporting the voucher program. You can find the complaints (opposing the program) on IJ’s website, and Judge Hopgood’s order granting the preliminary injunction is here. (Here’s an article about the immediate aftermath of the ruling, from the Carolina Journal, a publication of the John Locke Foundation. (Not this one.)) The plaintiffs raised a number of objections to the program, but the winning one here was based on Article IX, § 6 of the North Carolina Constitution (emphasis added):

The proceeds of all lands that have been or hereafter may be granted by the United States to this State, and not otherwise appropriated by this State or the United States; all moneys, stocks, bonds, and other property belonging to the State for purposes of public education; the net proceeds of all sales of the swamp lands belonging to the State; and all other grants, gifts, and devises that have been or hereafter may be made to the State, and not otherwise appropriated by the State or by the terms of the grant, gift, or devise, shall be paid into the State Treasury and, together with so much of the revenue of the State as may be set apart for that purpose, shall be faithfully appropriated and used exclusively for establishing and maintaining a uniform system of free public schools.

So basically a number of revenue sources, like money from the sale of swampland, are earmarked for uniform, free public education, and also whatever revenue “may be set apart for that purpose”. Now this one-sentence section isn’t exactly a model of clear drafting. What’s the “purpose” we’re talking about? The most logical option seems to be the “purposes” referred to earlier in the sentence: “for purposes of public education”. So, whatever state revenue is set apart for public education has to be used for free and uniform public schools.

This sort of funding provision — limiting certain educational funds to public schools — is present in a number of state constitutions (including Connecticut, Georgia, Missouri, New Jersey, Rhode Island, South Dakota, Texas, and Washington), and has recently been used to strike down vouchers in Louisiana, as I’ve written about elsewhere. (See also this article by Preston Green and Peter Moran on state constitutional provisions that may bar vouchers.) Structurally, this sort of provision doesn’t seem to limit funding vouchers out of the general fund — more on that later.

With this in mind, let’s take a brief look at Judge Hobgood’s opinion.

First, the judge went through the history of the provision, tracing it back to a provision in the 1868 constitution. The 1868 constitution required the state to provide a general and uniform system of free public schools, which had to be funded from an “irreducible educational fund”. In 1875, an amendment provided that state revenues expended “for the purposes of education” had to be spent exclusively on free public schools.

Fast forward to 1956, when North Carolina decided to deal with Brown v. Board of Education (1954) by amending the state constitution to allow for vouchers to students who were involuntarily assigned “to a public school attended by a child of another race”. Wow. That was struck down as unconstitutional in 1966; the only question is why it took 10 years. In the 1968 constitutional revision (approved in 1970), the section was removed because it was invalid, and previous sections about funding free and uniform public schools were moved to a different section number “without substantive change”.

All very interesting, but it doesn’t seem to affect the legal conclusion, so it’s hard to see what role it plays other than rhetorically discrediting the idea of vouchers by linking it with the 1950s segregationist voucher plan.

[UPDATE: I suppose you could also argue that, because people in 1956 thought that authorizing vouchers required a constitutional amendment, vouchers must not have been allowable under the 1868 constitution, and since the relevant provision from 1868 has carried over without substantive change to the modern constitution, vouchers are likewise impermissible today. This would be similar to arguing that the Commerce Clause doesn't allow Congress to ban drugs, since the fact that they passed the 18th Amendment -- authorizing alcohol prohibition -- suggests that alcohol prohibition (and thus drug prohibition) wasn't allowed under the Commerce Clause. I'm not a huge fan of this form of argument, but you do see it used occasionally.]

On to what I think of as the real substance — which starts on p. 12 (¶ 19) of the PDF of the opinion.

As I noted above, any money set apart for public education can’t be used for vouchers, because that’s not part of a system of uniform, free public schools. And the judge found that the Opportunity Scholarships Program did “redirect[] funds from the public schools”, in “likely violation” of the constitutional provision. First, the voucher legislation reduced public-school funding by $11.8 million. Second, the legislation provides that, when a voucher student leaves a public school, the funding of the public school system that student came from is reduced on a per-pupil basis during the school year. As the judge said, “This reduction, directly caused by the OSP [the voucher program], occurs after school districts have received their allotments of state funds for the school year.”

That’s the judge’s reasoning on the likelihood of success on the merits. (Then, to grant a preliminary injunction, you need to show that the plaintiffs would be irreparably harmed if the program were allowed to go forward while they were litigating. This seems reasonable to me: the voucher students haven’t even been determined yet because they haven’t yet run the lottery among the applicants to see who gets in. So the harm to them is just the general harm that the voucher program was trying to remedy; whereas taking already-appropriated money away from school systems seems like a greater disruption.)

The judge’s reasoning on this seems at least non-crazy. The two factors he noted — the reduction in funding by the legislation, and the ongoing reduction in the funding of particular school systems as students transfer out — seem to suggest that whatever money was going to the voucher program was money that had been set apart from public education.

But, as I’ve mentioned above, the constitutional provision doesn’t seem to prevent vouchers from being funded from the general fund, without any connection to the money set apart for public education. Of course, challengers could still claim that this money — because it funds free educations for students — is in reality “set apart” for public education, so it can’t be spent except to maintain free and uniform public schools. But that seems like a harder argument to make. (Also, there are the other constitutional arguments raised by the challengers: I’m not discussing those here, but you can check out the complaints to see those.)

Sasha Volokh lives in Atlanta with his wife and three kids, and is an associate professor at Emory Law School. He has written numerous articles and commentaries on law and economics, privatization, antitrust, prisons, constitutional law, regulation, torts, and legal history.
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