After a hurricane, can the NC Governor reshuffle agency appropriations to create new direct-aid programs for flood victims without going back to the General Assembly?
Plain-English summary
State Budget Officer Marvin K. Dorman, Jr. needed legal clarity after Hurricane Floyd. Federal aid was flowing but had gaps. The Governor wanted to use existing agency budgets to plug those gaps with new direct-aid programs, but Dorman needed to know whether the Governor could rearrange the budget that way without a special legislative session.
Chief Deputy AG Edwin M. Speas, Jr. read G.S. § 166A-6(c)(5) literally and concluded the Governor had the authority. The statute gave the Governor power, "during a state of disaster," and "with the concurrence of the Council of State," to reallocate funds "as may reasonably be available within the appropriations of the various departments" for emergency relief. There was no ambiguity in those words. The General Assembly had purposefully designed the statute to let the Governor move money quickly when disaster struck.
The AG saw "very broad discretion" baked into the statute. The Governor decided what programs were needed. The Governor decided which agency budgets could spare what funds. The Governor weighed program needs against the agencies' duties. The AG cited Starling v. Constantine, 287 U.S. 378 (1932), for the proposition that a governor's good-faith emergency judgments are ordinarily not subject to judicial review. The discretion was wide, but not boundless: the statute required Council of State concurrence, which provided the institutional check.
The AG saw no conflict with the Executive Budget Act, G.S. § 143-1 et seq. In fact, the Budget Act itself granted parallel emergency budget powers in § 143-23(a1)(2)(b) (the Governor could increase budgeted expenditures when "required to respond to an unanticipated disaster such as a . . . hurricane"). The two grants of authority operated together.
One important limit: the Savings Reserve Account in G.S. § 143-15.3 was off-limits. That account is a "restricted reserve in the General Fund." The legislature had set it aside specifically for state savings, and the Governor's § 166A-6(c)(5) power to reallocate "within the appropriations of the various departments" did not reach a restricted General Fund reserve. To get at the Savings Reserve, the Governor would need a separate legislative action.
The opinion ended with the AG's standard offer of further legal assistance as new questions arose. The Floyd response was unprecedented in NC, and other legal questions about specific programs were sure to follow.
Currency note
This opinion was issued in 1999. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Chapter 166A (the Emergency Management Act) was substantially rewritten in 2012 by S.L. 2012-12. The specific subsection numbers and the precise scope of the Governor's reallocation power may differ from what this opinion described.
Background and statutory framework
The Emergency Management Act. G.S. Chapter 166A established the framework for state-level disaster response. Its purpose, stated in G.S. § 166A-2, was to "provide for the rapid and orderly rehabilitation of persons and the restoration of property" affected by disasters. The chapter contemplated unusual flexibility precisely because emergencies do not wait for legislative timelines.
The state of disaster trigger. Under G.S. § 166A-6, a "state of disaster" could be proclaimed by either the Governor or the General Assembly. Once declared, the special emergency budget powers in § 166A-6(c)(5) activated. Hurricane Floyd was the first declared state of disaster after the chapter took its modern form.
The reallocation power. G.S. § 166A-6(c)(5) was the operative provision. Two conditions: (1) a declared state of disaster, and (2) Council of State concurrence. With both conditions met, the Governor could reallocate funds "within the appropriations of the various departments" for emergency rehabilitation and restoration.
The Council of State concurrence. The Council of State, an NC body composed of the elected statewide constitutional officers, served as a check on the Governor's emergency budget discretion. The Governor could not act unilaterally; agency reallocations required the Council's sign-off. This requirement embedded political accountability and inter-officer review into the emergency budget process.
The "various departments" phrase. The AG read this phrase to cover ordinary executive-branch appropriations. The Governor could take money from one agency's budget and put it into another agency's relief program, so long as the source agency could spare the funds without compromising essential operations. The AG noted that the Governor must weigh the disaster's magnitude against each agency's "obligation . . . to fulfill their duties to citizens."
The Savings Reserve carve-out. The Savings Reserve Account in G.S. § 143-15.3 sat in the General Fund as a restricted reserve. It was not an agency appropriation. The AG concluded the § 166A-6(c)(5) reallocation power did not reach it. This was a meaningful limit. The Savings Reserve was the state's true rainy-day fund. The General Assembly had reserved itself the authority to tap it.
Interaction with the Executive Budget Act. The Budget Act (G.S. § 143-1 et seq.) gave the Governor independent emergency budget powers under § 143-23(a1)(2)(b). For an unanticipated disaster (the statute named hurricanes specifically), the Governor could increase budgeted expenditures. The AG saw the two grants of authority as complementary, not conflicting. The § 166A-6(c)(5) power moved money between agencies; the § 143-23(a1)(2)(b) power increased agency budget ceilings.
The Starling deference rule. The AG's citation of Starling v. Constantine (1932) signaled that the Governor's emergency budget judgments would be entitled to substantial deference in any court challenge. Federal precedent had long recognized that emergency governance does not lend itself to second-guessing by judges. NC courts had not formally adopted the same rule for state-level emergencies, but the federal precedent was a strong analogy.
Common questions
Q: What did the Governor have to do before reallocating funds?
A: Two things, sequentially: (1) declare a state of disaster (or rely on a legislative declaration), and (2) obtain the concurrence of the Council of State. Both were procedural prerequisites.
Q: Could the Governor design new programs that didn't exist before the storm?
A: Yes. The AG explicitly said the reallocation power included "the authority to create programs to aid flood victims who are not otherwise eligible for federal or State aid." The Governor was not limited to expanding existing programs; he could invent new ones.
Q: Could the Governor take money from any agency budget?
A: Practically, no. The AG flagged that the Governor must weigh the source agency's duty to its constituents against the emergency need. Stripping a public-safety budget to fund a non-emergency program would not survive scrutiny. The discretion was broad, but not unbounded.
Q: Was the Savings Reserve really off-limits?
A: The AG read § 166A-6(c)(5) to authorize reallocation "within the appropriations of the various departments." The Savings Reserve was not an agency appropriation. It was a restricted General Fund reserve. The AG concluded the power did not reach it. To tap the reserve, the legislature itself would need to act.
Q: Could the General Assembly override the Governor's reallocation decisions?
A: Yes, by appropriation. The legislature controls the budget. The Governor's emergency power was an interim mechanism that could be confirmed, modified, or replaced when the General Assembly next sat.
Q: Did the AG address fiscal accountability for the reallocated funds?
A: Not specifically in this opinion. The Executive Budget Act's normal accounting and audit requirements would presumably continue to apply.
Citations from the opinion
- N.C. Gen. Stat. § 166A-2
- N.C. Gen. Stat. § 166A-5
- N.C. Gen. Stat. § 166A-6
- N.C. Gen. Stat. § 166A-6(c)(5)
- N.C. Gen. Stat. § 143-1 et seq. (Executive Budget Act)
- N.C. Gen. Stat. § 143-15.3 (Savings Reserve Account)
- N.C. Gen. Stat. § 143-23(a1)(2)(b)
- Starling v. Constantine, 287 U.S. 378, 398 (1932)
Source
Original opinion text
Best-effort transcription from the NCDOJ landing page; the leading paragraphs were not in the scraped capture, so the text below begins mid-analysis where the capture starts. The linked landing page is authoritative.
- (1) the existence of a state of disaster proclaimed by the Governor or the General Assembly and
- (2) the concurrence of the Council of State.
Id.
There is nothing ambiguous about the words of these statutes. In order to accomplish its purpose of providing for "the rapid and orderly rehabilitation of persons and the restoration of property," the General Assembly conferred on the Governor the power to provide that relief to citizens through the reallocation of such funds "as may reasonably be available within the appropriations of the various departments." These words clearly encompass the authority to create programs to aid flood victims who are not otherwise eligible for federal or State aid and to fund those programs from agency appropriations which can be diverted to that purpose without unnecessarily compromising the agencies' ability to perform their duties. In this regard, the Governor has very broad discretion to determine the type of programs needed to provide relief to citizens and the level of funds which may reasonably be available within the appropriations of the various departments to fund those programs. In making these judgments, the Governor must weigh both the magnitude of the disaster and the obligation of the departments to fulfill their duties to citizens. Cf. Starling v. Constantine, 287 U.S. 378, 398 (1932) (observing that the good faith judgments of a governor regarding the exercise of his emergency powers are ordinarily not subject to judicial review).
We find nothing in the Executive Budget Act, G.S. § 143-1, et seq., that is inconsistent with the General Assembly's grant of emergency powers to the Governor in G.S. § 166A-6(c)(5). Indeed, the Executive Budget Act itself grants emergency powers to the Governor. See G.S. § 143-23(a1)(2)(b) which confers the power on the Governor to increase budgeted expenditures for programs or purposes when "required to respond to an unanticipated disaster such as a . . . hurricane." Please note, however, that the emergency powers granted the Governor by G.S. § 166A-6(c)(5) to reallocate funds do not include the power to utilize the Savings Revenue Account created by G.S. § 143-15.3 for emergency purposes. That account is a "restricted reserve in the General Fund," and, therefore, this money is not subject to the Governor's power under G.S. § 166A-6(c)(5) to reallocate funds "within the appropriations of the various departments."
In summary, it is our opinion that the General Assembly, by G.S. §§ 166A-2 and 6(c)(5), has conferred the power on the Governor during a state of disaster, and with the concurrence of the Council of State, to establish programs to aid the victims of that disaster and to fund those programs from appropriations to the State's agencies and institutions.
Other legal questions may arise in the course of the creation or implementation of these flood relief programs. We, of course, are available to assist with such legal questions.
Sincerely,
Edwin M. Speas, Jr.
Chief Deputy Attorney General
EMSJr/spw