2 N.C. Counties Challenge State In Tax Lawsuit

The resolution to file suit originated with Cabarrus County Commissioner Coy Privette. Alamance County has also joined the lawsuit.

It will be brought against N.C. Department of Revenue Secretary Norris Tolson and will be filed next week.

Easley announced plans Feb. 5 to withhold about $200 million from municipal governments to help alleviate a $1 billion state budget shortfall for the 2001-02 fiscal year.

The governor's office would not comment on pending litigation.

Privette said he introduced the resolution because Easley illegally impounded local tax revenue to fix the state's financial problem.

"It's our opinion that one person does not have the statutory authority to unbalance the budget of 100 counties and 641 towns and cities," he said.

He added that Tolson is implicated because he failed to uphold the mission of his office.

"The laws of North Carolina state very clearly and specifically that the secretary of the Department of Revenue ... shall remit to local governments that (which) belongs to them," Privette said.

The lawsuit is open to any county that wants to join, said Gene Boyce, the case's lead attorney. "We will proceed on behalf of whoever wants to go," Boyce said.

The state's 100 counties will receive a copy of Cabarrus County's resolution, Privette said. He added that the board already received calls from representatives of other counties interested in legal action.

John Patterson, chairman of the Alamance County Board of Commissioners, said the county attorney was already considering possible legal action when presented with the opportunity to join the lawsuit brought by Cabarrus County officials.

"It was my feeling when this first happened that what the governor was doing was improper and illegal," he said. "When (we) got an opportunity to participate with Cabarrus County, we jumped into that."

Orange County officials say it is unclear if their county would join the lawsuit, despite overwhelming disapproval of the governor's actions.

"I haven't heard of it before, but it is certainly an intriguing possibility," said Barry Jacobs, chairman of the Orange County Board of Commissioners. "We are frustrated and somewhat disgusted with the lack of leadership by the governor and the state legislature in addressing the budget problems in a sound manner."

Boyce said it is likely the counties suing the state will eventually be able to collect their lost revenue.

"The executive branch has no legal or constitutional authority to balance the state budget by unbalancing local budgets," he said. "I (think) we've got a reasonably good chance of winning."

The State & National Editor can be reached at stntdesk@unc.edu.