Golden Leaf Isn't Budget's Silver Bullet

Several leaders in the state House of Representatives have proposed that the N.C. General Assembly use part of the $4.6 billion North Carolina will receive over the next 25 years to balance the state budget.

The money currently is slated for three programs. Half will go to the Golden Long-Term Economic Advancement Fund, which will invest it and use the interest to promote economic development in eastern North Carolina.

The other half will be divided evenly between the Health Trust Fund and the Tobacco Trust Fund, which will help tobacco farmers, quota holders and tobacco-related businesses directly.

Two Democrats running for speaker of the state House have suggested that the way to resolve North Carolina's budget woes would be to dump this money, especially Golden L.E.A.F.'s funds, in the general fund to finance Smart Start, increased teacher salaries and taxpayer lawsuits lost by the state.

Granted, the state is pressed for cash. There are no easy answers.

And granted, other states have used their tobacco settlement funds for flood control, rainy-day funds and taxpayer refunds.

But to throw away this tobacco settlement money on short-term goals is the wrong idea.

North Carolina will be better served in the long run for the tobacco money to stay exactly where it is, accruing interest and continuing to benefit the state.

"If we take and spend it on an annual basis, it's gone," said Gordon Allen, D-Roxboro, co-chairman of the House tobacco settlement issues committee.

"We have an opportunity to build that into something to benefit all the citizens of North Carolina."

While adding the money to the general fund would be a temporary bandage for the state's problems, actively developing eastern North Carolina's economy is a more permanent solution.

Cigarette companies are buying more overseas tobacco, which is driving down the prices for farmers.

The trend will only get worse.

The state needs to use this tobacco settlement money to help the farmers transition into new crops they'll find profitable, though few exist that are as profitable as tobacco used to be.

It's also only practical to promote industry and technology in the eastern part of the state.

In an age of farming conglomerates, the state's economy should move away from such dependence on agriculture and small farmers in an industry under siege.

Richard Daynard, director of the Tobacco Control Research Center, advocates yet another use of the funds.

The most effective use of tobacco settlement money, he said, is to keep people from starting to smoke, then helping them when they do.

Aiding tobacco farmers is only useful to a point, he said.

"To do that is to sacrifice the health of the citizens of North Carolina for the benefit of special interest groups, this one small sector," Daynard said.

But that's just not true. While the state should certainly allocate some portion of the funds to smoking prevention, using the funds to improve the economy down east will help the entire state in the long run.

The discussion isn't fazing former UNC-system President Bill Friday, who now heads Golden L.E.A.F.

He said last week that he had spoken to N.C. Sen. Marc Basnight, D-Manteo, who assured him the Senate would keep the money where it belongs.

On Tuesday, Friday and the foundation sifted through 400 proposals to allocate the first group of grants to eastern North Carolina.

"What the legislature is doing in establishing the fund is unique and wonderful, I think," Friday said.

"The fund will do things all over the state in time and will end up being worth much more eventually."

Columnist Anne Fawcett can be reached at fawcetta@hotmail.com.