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Thursday, February 05, 2009

Va.'s spending of $1 billion in tobacco-settlement funds on tobacco-dependent counties questioned

Facing budget cuts and possible tax increases, Virginia lawmakers are "asking pointed questions about whether the state ... properly spent more than $1 billion" from the national tobacco settlement in the counties that once depended on the crop, Anita Kumar of The Washington Post reports from Richmond.

Settlement money has funded "more than 1,000 projects," Kumar reports. "It paid for high-speed Internet access in rural areas, upgrades to sewer lines, a scenic trail to honor Virginia's musical heritage and a railroad museum." But Nelson Link, chief of farm programs for the federal Farm Service Agency, told her, "Some of the stuff it has gone to is very controversial. You've heard the expression: If you build it, they will come? It hasn't happened like they hoped." Link's family has a tobacco farm on the North Carolina border.

Last year, a study headed by former Gov. Gerald L. Baliles "faulted the commission for not tracking its results and suggested an audit. The group ... noted that despite the influx of money, the region suffers from declining population, low pay and high unemployment." (Read more)

Virginia was one of three states to allocate half its settlement money for the economies of rural counties. North Carolina invested its money and spends only the earnings; Kentucky, with more farmers and thus more pressure to dole out funds, spends the money more or less as it comes in. Most of it has gone to improve the cattle industry in the state, which is the largest cattle state east of the Mississippi. For a report on Kentucky and North Carolina, click here.

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