By Jim Smith

In 1999, the North Carolina Legislature created the Golden LEAF Foundation to administer one half of North Carolina share of the Master Settlement Agreement with cigarette manufacturers. The agreement between the state Attorneys General of 46 states, five U.S. territories, the District of Columbia and the five largest tobacco companies in America concerned the advertising, marketing and promotion of tobacco products. It settled Medicaid lawsuits against the tobacco industry for recovery of tobacco related health care costs.

From its beginning, Golden LEAF has used its funds to promote North Carolina’s long-term economy, especially in tobacco dependent, economically distressed and rural communities. Every April North Carolina receives $140 million under the agreement. Prior to two years ago, when the Legislature diverted Golden LEAF’s current and future income and investment income, it was used to fund grants to government, educational institutions, economic development organizations and nonprofits. $568 million has been used to fund 1,295 grants. These grants have resulted in more than 48,000 new jobs, private investment of $2.9 billion and an increase of more than $300 million in new payrolls per year, directly assisting over 1.1 million North Carolinians.

State government recently announced a $400 million surplus. $70 million of that money is funds diverted from the Golden LEAF Foundation. Not only does the Foundation lose more than $650 million in payments over the next 10 years, but also the opportunity to earn $250 million more in investment earnings. It is a total loss of more than $900 million in proceeds, which should serve communities that are in need of the most help with economic transition away from tobacco.
Other states that have used their settlement funds to balance their budgets cannot describe how the money is used. This action by the Legislature will have North Carolina permanently join the ranks of states that have used their Master Settlement Agreement funds to supplement budgets and give tax cuts, but now have little to show for those actions. Golden LEAF can show how every dollar of the Master Settlement payments have been used. The Master Settlement Agreement payments from cigarette manufacturers, which are not tax dollars, should not be taken away from the tobacco dependent Eastern North Carolina municipalities for whom they were intended.

Jim Smith is the first vice president of the Beaufort County Democratic Party.