Golden LEAF faces hurdles

Published 10:40 am Tuesday, March 24, 2009

By Staff
Lawmakers want access to foundation’s revenues to aid state’s ailing budget
Contributing Editor
The Golden LEAF Foundation is implementing changes in an effort to help local governments and nonprofit groups endure a lousy economy.
Those changes include increasing its commitment to Tier 1 counties across the state, including area counties, with up to $35 million for its Community Assistance Initiative, said Dan Gerlach, Golden LEAF’s president. Tier 1 counties are the 40 counties designated as the most economically-stressed counties in the state.
Golden LEAF’s changes and desire to provide more financial help may run into some hurdles if some state lawmakers have their way.
The foundation’s critics contend its decisions on grants have been influenced by politics and that Golden LEAF is not doing enough to help the rural counties it’s supposed to assist.
State Rep. Paul Stam, a Republican from Wake County, believes a new attempt by some state legislators to strip the foundation of its money has a better chance of succeeding than previous such attempts. Stam has introduced a bill in the House that would redirect future contributions to Golden LEAF.
A similar bill has been introduced in the state Senate, Stam told the Daily News.
Stam said the money going to Golden LEAF “should have come to the general fund to begin with.” The state would spend $70 million each year on economic development instead of keeping it and spending only the interest on that money on economic-development projects, he said.
Stam said his concerns with Golden LEAF are with its board of directors, not its management.
The state faces a nearly $3 billion shortfall in projected revenues because the recession is reducing tax-generated revenues. Golden LEAF doesn’t want its money used to close that budget gap.
Golden LEAF’s 2009-2010 fiscal year budget will be 22 percent less than its current budget, Gerlach said. If future yearly payments are not forthcoming, Golden LEAF will have to reduce its grant allocations by two/thirds, he said.
Beaufort County Manager Paul Spruill wants Golden LEAF to continue its support of economic development for Tier 1 counties. Much of that support helps build new infrastructure like water and sewer system or aids with expanding existing systems, he noted.
Because of the recession, that dependency is “much more now than in the past,” Spruill said.
Even in this economy, some businesses and industries in eastern North Carolina want to grow, he said. Some businesses and industries are interested in relocating to the region, Gerlach added. To help make that happen Golden LEAF has money to help pay for short-term training of workers for those businesses and industries, he said.