Raleigh, N.C. — Groups that support economic development in North Carolina's rural counties say they were stunned to learn they were left out when Gov. Pat McCrory outlined his spending priorities this week.
"Everything we heard was rural areas are going to fully participate, and here we go. Then, we got a budget," said Billy Ray Hall, president of the North Carolina Rural Economic Development Center.
McCrory's proposed 2013-14 budget cuts the Rural Center's appropriation from $16 million to $6 million. It also would remove all $65 million in annual money from Golden LEAF, a Rocky Mount foundation that uses money from the national tobacco litigation settlement to fund economic development projects in poor counties.
"I'm surprised by this," said Dan Gerlach, president of Golden LEAF.
McCrory had previously said he wanted to boost development outside of North Carolina's urban centers.
"Our biggest challenge is to develop a strategy for small towns across North Carolina that have been hit hard by this recession," he said in his State of the State address in January. "We've got to work with the small towns in North Carolina. There are too many people hurting in those small towns."
The Rural Center already works with those towns on infrastructure linked to job creation, such as water and sewer lines at a Caterpillar Inc. equipment plant in Clayton or up-fitting an old Henderson warehouse so Semprius could build solar energy cells.
Hall said such a steep budget cut could prevent the center from helping communities that turn to him when they're close to landing a major employer.
"(They will ask) 'We've got 2,000 jobs, and what can you do?' And I'll say, 'Nothing,'" he said. "What worries me is, are rural communities going to participate in the recovery as they might have?"
If the annual payment from the tobacco settlement is going to go to the state's General Fund instead of to Golden LEAF, the foundation will have to rely solely on investment income from its $750 million portfolio to provide grants, Gerlach said. The organization has funded everything from laptops for schools to a $100 million grant to attract aircraft manufacturer Spirit Aerosystems to Kinston.
"If it's taken away from us, where does this money go to help those communities that are left behind? I don't see it," he said. "This is not the death knell of the foundation. It's simply going to dramatically affect our ability to accomplish some of the objectives that everyone wants to have, which is a more economically prosperous state."
McCrory spokeswoman Kim Genardo praised the work of Golden LEAF and the Rural Center, but she said allowing the governor and lawmakers to "make transparent decisions" with state money is the best way to "fund our highest priorities."
The two organizations also will be addressed as McCrory and Commerce Secretary Sharon Decker overhaul the Department of Commerce to streamline economic development efforts, Genardo said.