In a split decision issued Tuesday, the N.C. Court of Appeals ruled that a lower court acted appropriately in dismissing a lawsuit filed against former State Treasurer Richard Moore.

The State Employees Association of North Carolina sued in 2008 over a dispute about whether Moore's office had provided public records requested by the group regarding the handling of the state retirement system.

Moore's lawyer argued in Wake Superior Court in June 2008 that the association cannot point to a single specific public record that had been withheld, and Judge James E. Hardin dismissed the suit.

In Tuesday's decision, appeals court Judges Cheri Beasley and Wanda G. Bryant ruled that Hardin was right to dismiss the case, ruling that Moore had fulfilled his obligation under the state's public records law to search his files for documents covered under the request filed by SEANC.

Appeals Court Judge Rick Elmore dissented, writing in a separate opinion that the employees group had shown that Moore had likely withheld records he was legally obligated to provide.

UPDATE: Thomas A. Harris, the chief of staff and general counsel for SEANC, said he will recommend to the group's board that they appeal Tuesday's decision to the N.C. Supreme Court.

"The majority opinion misstates the facts of the case and, as the dissent points out, adds a equirement for maintaining a Public Records Act lawsuit that is not in the law itself," Harris said in an e-mail to Dome.

Moore said: "This news, combined with the other recent news that North Carolina's pension fund was the best performing in the country for this past fiscal year, are nice exclamation points to the end of my 8-year-tenure."

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Two years ago, State Highway Patrol Capt. Marc Nichols was on leave for nearly three months to deal with an extended illness that required two surgeries. The entire leave was covered by comp time he had built up.

North Carolina offers its workers and educators compensation and retirement benefits that are often much better than the private sector's and, in at least one case, unusual even among public-sector employees, according to an N&O analysis.

Each additional benefit tends to amplify the existing ones; the state is now obligated to pay $714 million in accrued vacation and bonus time, more than double what was on the books six years ago. And that number is just for employees of state agencies and the UNC System. It doesn't include public school or community college workers.

That extra cost is important now because of the state's budget crisis. Legislators are struggling to close a $4.5 billion budget shortfall for the fiscal year that starts July 1, but they have been reluctant to take on key constituencies or powerful special interests, such as state workers. Here's the full story.

A major fix for the State Health Plan is ready for a Senate vote.

The Senate Appropriations Committee today approved legislation that would cost the general fund $250 million for the current fiscal year ending June 30, and another $609 million for the next two fiscal years, Dan Kane reports.

The legislation also reduces benefits to the roughly 667,000 state employees, teachers and retirees on the health plan by raising co-payments and deductibles.

The committee rejected an amendment offered by state Sen. Doug Berger, a Franklin County Democrat, that would open up plan contracts to the public. He offered the amendment on behalf of the State Employees Association of North Carolina, a group that has questioned the need to cut benefits for employees.

State law keeps nearly all the details of contracts the plan has with vendors secret. Berger said the secrecy prevents the public from having information to make informed decisions about the plan's operations.

"I think now more than ever there needs to be an opening of this process so there is more information," Berger said.

More after the jump.

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State employees, retirees and dependents would have to pay more for health care coverage if they smoke or are significantly overweight, under a proposal announced this morning to help stabilize the state's health insurance plan.

The health plan is spending more than it is taking in, and as a result it faces a $260 million shortfall by June 30, the end of the fiscal year. Lawmakers are hoping to prop up the plan by drawing from the state's "rainy day fund."

But they also are considering broader changes to keep the plan solvent, to encourage younger and healthier people to join the plan and to discourage bad health habits, reports Dan Kane.

Sen. Tony Rand and Rep. Hugh Holliman, who head a committee that oversees the plan, today rolled out a proposal for those longer-term measures.

They include requiring those who smoke or are very overweight to enroll in the most expensive of the health plan's options for coverage. The proposal also would cut benefits for participants in the plan and raise premiums by less than 10 percent.

The health plan covers 667,000 state employees, teachers, retirees and their families.

State agencies remained open today, but many workers did not show up for work.

State policy asks that employees make a “good faith effort” to get into work but otherwise can use vacation time, unpaid leave or make up the day later, reports Mark Johnson.

The Office of State Personnel found that there is no basis to allegations that former Division of Motor Vehicles Commissioner Bill Gore used favoritism in hiring.

The claims were made by Gore's former second-in-command, Wayne Hurder. Hurder was fired in November after an internal DMV investigation found that he had allowed a Greene County patronage boss, Eddie Carroll Thomas, to have longstanding and widespread influence over personnel matters within the Driver and Vehicle Services section.

Hurder claimed in a suit filed shortly after his termination that Gore had violated personnel procedures in seeking to help two people get DMV positions, reports Dan Kane. One is the son of a former neighbor of Gore's who won a summer internship; the other was a temporary DMV employee who sought a fulltime job.

An investigation by the state personnel office found that Hurder came up with the idea of the summer internship and set it in motion, and did not raise objections about it at the time. Another person who had no connection to Gore was selected for a second internship.

As for the temporary employee, the investigation found that Gore expressed an interest in hiring him fulltime because he had fixed some equipment that others responsible for the repair had failed to fix. But the investigation found that Gore did not get involved in the hiring process as the temporary employee applied for two jobs, one of which he won.

Read more after the jump.

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Labor unions last week gave $730,000 to the N.C. Democratic Party, which in turn gave large contributions to the party's nominee for governor.

Campaign finance reports show that the state Democratic Party received $730,000 from three union political action committees. The party then turned around and gave Lt. Gov. Beverly Perdue's campaign an $875,000 contribution and spent $245,000 to send mailers on her behalf. That infusion of cash represents a quarter of the $4.6 million Perdue raised in the last three months.

Detailed campaign finance reports for the last three months are not yet publicly available. The donations were included in required 48-hour reports over the last week.

More after the jump.

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The state's new payroll system has caused thousands to have problems.

Employees across North Carolina have spent months trying to resolve problems with paychecks that are sometimes more than $1,000 short. Pay stubs are confusing, and state workers say they cannot keep track of how much they're owed.

Officials have downplayed the problems, but the State Employees Association of North Carolina has heard from hundreds of angry employees about the incorrect paychecks. The system's call center has received 64,503 questions and complaints since December.

Some state employees say they're falling behind on car and mortgage payments, while others face eviction because of unpaid rent.

State Controller Robert Powell, whose office runs the new payroll and personnel system, said planners anticipated the problems.

"What we're experiencing is not unexpected," he said. "We're operating a new system that is paying about 90,000 people." (N&O)

The last big battle between the House and Senate this session may well be how to bail out the N.C. State Health Plan.

The House passed legislation that would provide $100 million from the rainy day fund to cover deficits in the plan, which legislative leaders say could be steep by early next year, Dan Kane reports.

But Senate leaders say they are considering raising co-payments or deductibles for the roughly 650,000 teachers, state employees, retirees and their families to cover deficits.

"I'm sorry that we have to be tweaking this right now, but we have to be prudent so we don't crash the system," said state Sen. Linda Garrou, a Winston-Salem Democrat and chief budget writer.

House leaders say they don't want to hit those on the plan with an increase at a time when gas and food prices are rising.

"It seems to me that this is the only choice among difficult choices," said Rep. Dan Blue, a Raleigh Democrat, after the House rolled out its plan.

More after the jump.

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Gov. Mike Easley ended the suspense today and signed the $21.4 billion state budget bill into law.

"The governor has signed the budget and thanks legislators for their hard work," said a statement from Easley's office. "He looks forward to the General Assembly finishing work on important remaining issues including legislation on drought, home foreclosure and mental health."

The budget includes modest pay increases for teachers and most state employees, no tax increases and a record $857 million in borrowing without voter approval for construction projects.

Lawmakers approved the budget last week, but Easley has been negotiating for additional money for his Learn and Earn initiative that provides high school students with a four-year college degree tuition free.

He had until the end of Friday to decide whether to sign or veto the budget before it became law — if the legislature remained in session.

If they had left by then, Easley would have received another 30 days to make a decision.

Easley did not hold a public signing of the budget bill as he has in years past.