Clean up state budget mess before touching Golden LEAF

First Posted: 3/21/2009

North Carolina House Rep. Paul Stam, a Wake County Republican, has introduced a bill in the General Assembly that would end the practice of tobacco settlement payment money going to Golden LEAF Foundation.
State Sen. Daniel Clodfelter, a Mecklenburg County Democrat, has introduced a similar measure in the senate, although his bill calls for the settlement money diversion to last just three years.
Golden LEAF was created to take half of the states settlement money each year, creating an endowment and program which awards grants to economically struggling localities.
Because Surry County has benefited from the Golden LEAFs program to the tune of $1.8 million in grants and another $2 million in commitments, it would be easy for us to blast the measures as simply short-sighted, a way that legislators from more urban areas are seeking to take away from their rural counterparts to balance the states budget.
But, Stams reasons make sense.
His contention is that the states which sued the tobacco companies including North Carolina did so because of the high Medicaid costs the states were incurring to pay for treatment of health problems experienced by long-time smokers.
If youre doing restitution, that money should be going back to the general funds that pays for Medicaid, he said. And, truthfully, hes right.
He also contends that if the $70 million annual payment which goes into Golden LEAF had been going into the general fund, counties including Surry would have received far more than the Golden LEAF grants have doled out. He went so far as to call the $3.8 million Surry has been awarded peanuts.
This is where we take issue with Rep. Stam.
Funny things happen to money when it goes to Raleigh. Gasoline tax money which is supposed to be used for highway construction and maintenance ends up doing just that in Raleigh and Charlotte, but never quite makes it to rural areas. When the budget gets tight, that Highway Trust Fund is raided by governors as means to balance the budget, and roads are left to crumble.
The state constitution requires that all fines and forfeitures collected because of violations of some state laws be used exclusively for maintaining free public schools, yet state agencies took it upon themselves, for nearly a decade, to withhold those fees and spend them elsewhere. Only a state Supreme Court decision in 2005 put a stop to the practice, and most school localities still havent received that money.
Lottery proceeds which are to fund long-term capital improvements in school systems across the state have been tapped by Gov. Beverly Perdue to balance short-term budget shortfalls, and in her budget proposal last week, she calls for the state to continue this backwards practice while doing nothing to reign in the spending that causes these budget shortfalls.
Corporate taxes collected in North Carolina and then administered to school districts based on each districts attendance figures have all but stopped, with the money now being used to balance the state budget.
The list could continue.
North Carolina has a horrible record of meeting its financial commitments when it comes to funding localities and their school districts.
While Rep. Stam makes some sense in the reasoning behind his bill, wed rather settle for the $3.8 million peanuts Golden LEAF is sending our way than the empty promise of Raleigh making use of that money.

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