After long skepticism, NC Republican lawmakers may give funds again to Golden LEAF again



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RALEIGH, North Carolina — Republicans at the General Assembly who once soured upon a foundation that used to get half of North Carolina's national tobacco settlement money may be coming around to embrace it, or at least accept it.

The two-year state Senate budget the chamber approved last month would give $20.1 million annually to the Golden LEAF Foundation, which was created in 1999 by a Democratic-controlled Legislature to help small towns and regions dependent on a declining tobacco economy. The private foundation awards grants and invests in potential job-creating industries.

Key GOP lawmakers at the Legislature had been skeptical of the effectiveness of the foundation, particularly as Democrats controlled most of the board appointments before the partisan shift in state government in 2011. Facing budget shortfalls, Republicans reduced and later eliminated the annual amount the foundation received to locate cash.

While the Senate's proposal is below the $70 million or so it used to count on receiving annually — and the House budget offers no funds — the foundation seems to have more friends again in the Legislative Building.

"Golden LEAF for the most part has done a great job helping rural North Carolina with having access to capital for improvements and economic development that they couldn't have gotten elsewhere," said Sen. Brent Jackson, R-Sampson, co-chairman of the Senate Appropriations Committee. "And I feel like with this being tobacco money from rural North Carolina, that's where some of this money should go back."

The Golden Long-term Economic Advancement Foundation and two other trust funds were created to use North Carolina's share of the 1988 settlement between states and the major tobacco companies. North Carolina's share is projected at $4.5 billion cumulatively by 2025.

Republicans didn't like the earmarks and needed cash to fill budget holes. So by 2013, lawmakers kept all the settlement money, or $137.5 million annually.

The Tobacco Trust Fund Commission, which had gotten 25 percent of the state's share and focused on helping leaf growers, watched its appropriation plummet in 2012 to $2 million annually. The House budget now wants to raise that to $3 million. The Legislature abolished the Health and Wellness Trust Fund, which got the other 25 percent, in 2011. It was best known for an anti-smoking advertising campaign targeting teenagers.

Dan Gerlach, foundation president since 2008, said he believes there are many reasons why the spigot may be turned back on for Golden LEAF, which could lead to more grants and initiatives.

State government's fiscal picture has improved. Although the foundation has awarded more than 1,300 grants totaling $590 million since its inception, the foundation still held $890 million as of April 30 and has proven good returns on its investments, according to Gerlach, previously a budget adviser to Democratic Gov. Mike Easley.

The group's goals also fit into efforts by GOP Gov. Pat McCrory and lawmakers to help rural communities and improve job skills for potential workers for employers, he said.

But there's also little doubt having Republican legislative leaders and McCrory make appointments to the foundation board has helped, too.

"That has had some confidence building," Jackson said. Appointees have included Art Pope, who later became McCrory's state budget director. Ex-state Rep. Johnathan Rhyne is now board chairman.

Gerlach said the foundation's nonprofit status also could be hurt without an appropriation, potentially forcing them to pay investment income taxes. Rep. Paul Stam, R-Wake, a longtime foundation critic, said he wouldn't fight sending some money to Golden LEAF again if it meant avoiding the tax problems.

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