The Master Settlement Agreement (MSA) was signed by cigarette manufacturers and the states’ attorneys general in 1998.
This national settlement resulted in much higher cigarette prices. That price hike and the accompanying educational programs that warned people of the hazards of using tobacco products caused consumption to decline.
The decrease in tobacco use continues today at the rate of about 3 percent annually. As a direct result of this settlement, the economies of North Carolina’s tobacco-dependent communities were adversely affected. The Golden LEAF Foundation and the Tobacco Trust Fund Commission were established to help our communities weather the economic storm, and hopefully, recover.
By the terms of the MSA, North Carolina is expected to receive annual payments totaling approximately $4.56 billion from participating manufacturers over the first 25 years of the agreement, years 2000 to 2025. The original vision of Bill Friday and the foundation’s board was to allow Golden LEAF funds to accumulate and serve as a nest egg for North Carolinians. Only the interest would be spent in serving the needs of our state’s citizens in the form of grants for worthwhile projects.
Many recent benefits to our communities have been realized from worthwhile projects. The just completed Western North Carolina livestock marketing facility enjoyed an overwhelming opening day, generating immediate private sales and income. Through foundation quick action, North Carolina was able to immediately help agriculture respond to the drought of 2007-2008.
Market development aided
Research grants have aided market development for sweet potatoes and grapes along with creating better links between farms and markets. From helping communities retain physicians to industrial recruitment, Golden LEAF and the Tobacco Trust Fund Commission have generated immediate positive impact.
In reality, the funds are venture capital — the only venture capital monies available in many areas of North Carolina. A balance of $1 billion to $2 billion in the Golden LEAF Foundation represents true opportunities for the future. Grants from Golden LEAF and the Tobacco Trust Fund Commission leverage local dollars and encourage private investors to build stronger communities and provide jobs for our people.
North Carolina Farm Bureau strongly supports the preservation of the tobacco settlement trust funds, both the Golden LEAF Foundation and the Tobacco Trust Fund Commission.
It is unfortunate that the economic condition of our state and nation has caused North Carolina to experience a drastic budget deficit. The easy answer is not always the best answer. Two wrongs never make a right. Farm Bureau urges the legislature to resist the temptation to balance the state’s budget at the expense of rural North Carolina’s future.
Seizing the accumulated funds in Golden LEAF to erase North Carolina’s budget deficit would be analogous to a farmer eating his seed corn. His seed is his hope for the future. Likewise, the Golden LEAF funds are among our state’s hopes for the future.
North Carolina is unique in that almost every other state squandered the MSA funds, while we chose to invest in the future. If changes are to be made in the operation and governance of the Golden LEAF Foundation, let’s have that discussion. Our economy will recover. Our urban economies will improve much faster than our rural counties. To decimate the Golden LEAF Foundation is shortsighted and wrong.