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House Majority Leader Targets Golden Leaf Foundation

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Rep. Paul Stam align=left

http://66.225.205.104/SG20110308.mp3

There's a good chance that the Golden Leaf Foundation will be mentioned when politicians make an economic development announcement. The foundation gets about $70 million a year in tobacco settlement funds, and a good portion of the money is often used to sweeten incentives offered to companies. House Majority leader Paul Stam thinks it amounts to a political slush fund. "The (Golden Leaf Foundation) was set up so that the governor and the legislative leaders at the time (11 years ago) would have a nice fund they could tap to do their favorite projects, which ultimately means in many cases making sure their friends' ideas are taken care of." So Stam is floating legislation that would dissolve the foundation and redirect that $70 million to the state Commerce Department. His proposal would also transfer $600 million in Golden Leaf assets to the state retirement system. WFAE's Scott Graf spoke to Stam about his proposal, and Governor Perdue's opposition to it. Graf: There's a good chance that the Golden Leaf Foundation will be mentioned when North Carolina politicians make an economic development announcement. That foundation gets about 70 million dollars a year in tobacco settlement funds, and a good portion of that money is often used to sweeten incentives offered to companies. House Majority Leader Paul Stam of Apex thinks it amounts to a political slush fund. Stam: This entirely separate private corporation was set up so that the governor and the legislative leaders at the time would have a nice fund they could tap to do their favorite projects, which ultimately means, you know, in many cases making sure their friends' ideas are taken care of. Graf: So, Stam is now floating legislation in Raleigh that would dissolve the foundation and redirect that $70 million to the State Commerce Department. His proposal would also transfer $600 million in Golden Leaf assets to the state's retirement system. Both Governor Bev Perdue and Stam weighed in on the issue yesterday. Stam: I hope the governor will think about it before taking a position on it. I think when she realizes what it does she may just think it's the best thing since sliced bread. Graf: The governor was here in Charlotte this week and actually spoke on this topic. I'm going to play a little of audio now from her roundtable that she had with some business leaders at the University of North Carolina in Charlotte. Listen to this and then I'm going to ask you to react to it. Perdue: The idea of collapsing the Golden Leaf fund to turn it into - it looked to me like a Christmas tree. They want to do this and this and this with the money from the Golden Leaf. The business community needs to stand up on this one. It really does need to stand up, or North Carolina will be cut off at the knees. Graf: Representative, that doesn't sound like a governor who is very willing to listen to your idea. You feel like you could change her mind? Stam: Well, if her mind is available to be changed, I do. Graf: The Golden Leaf Fund has been around now for nearly 12 years. In your opinion, how effective has it been? Stam: Well, you can't spend all that money without doing something good, but it could have been spent a whole lot better if it were in the regular appropriations process rather than being controlled by a patronage board. Graf: And that's what you consider it is? A patronage board? Stam: Well that's what it is. Graf: What makes you say that? Stam: Well, it has very loose requirements and it's controlled by 15 political appointees. Graf: Are there specific projects that you feel like you can hold up and point to and say that this right here is a patronage project? Stam: Well, I'm not going to do that because that would put the spotlight on a particular project, and that's not the point. Even if every project were wonderful, the very structure of it is wrong. Graf: Could the structure be improved or should it be scrapped? Stam: Yeah, it needs to be scrapped, and we will get more money for true economic development by routing the money through the Department of Commerce. And, by the way, the governor appoints the Secretary of Commerce, so we're not trying to take things away from her, but the yearly amounts need to go for true economic development and not based upon favoritism. Graf: And how much is it that's coming in each year to North Carolina? Stam: It's about 70 million a year. Graf: 70 million. Stam: Right. Graf: How would you like to use the $70 million coming in to North Carolina this year? How would you rather see that used? Stam: Well, first of all, there's two different pots of money. There's the 600 million of the corpus and then the 70 million. What we would use the annual payment of 70 million. Our proposal would use the 70 million, about 90 percent or about 80 percent to start with for economic development through the Department of Commerce and the community college system, and the part for the community college system would primarily be workforce training through the purchase of equipment and fixing labs and shops, stuff that the colleges need to train people to work. Then we would be giving money - not giving - appropriating money to the Department of Commerce. A lot of it would be used for our poorer counties: grants, our less poor counties: loans to attract business locations in the state. So, all of the things that are really necessary for economic development would be covered by this enhanced stream of funding. Graf: House Majority Leader, Representative Paul Stam, thank you for joining us. Stam: Hey, thank you.