Terry Kilgore and the Tobacco Commission.

Exposing the Virginia Tobacco Commission

According to the Blue Ribbon Review Panel (April 17, 2011) of the Virginia Tobacco Indemnification and Community Revitalization Commission, they have spent $432 million on more than 900 so-called "revitalization projects" since 2000. This website and writer has warned of this waste for years and sadly, I've been proven right. What do we get according to them? To quote,

An area of great concern with regards to the ability to revitalize the economy is education for young people and adults...(for)...Congressional District 9 (a proxy for Southwest) have much higher percentages of population over age 25 with no high school degree, and much lower percentages of people with bachelor's degrees or higher than either the rest of the state or the nation...

an analysis of Virginia Department of Education annual school enrollment data by grade shows that a number of localities in the region have much larger numbers of students in the ninth grade than in the twelfth grade three years later...The largest drop in numbers of students is occurring between the ninth and tenth grade...it is likely that most of these students are dropping out of high school and will not graduate.


I attribute this to out-migration that leaves behind a larger percentage of poorer and less motivated people. To continue:

As in the rest of Virginia, economic growth in Southside and Southwest Virginia is occurring in the services industries, including professional, technical, administrative support, healthcare, educational, repair, personal services, and "Other" employment categories including utilities, transportation, communication, information, finance, insurance, and real estate. However in the Southside/Southwest regions, the percentage of overall wages in these "information age" industries is still substantially below the rest of the State.

Not only the level of these jobs, but the wage scales are so low that those with degrees continue to flee the region. To further quote the report:

Given the existing state of the Southside and Southwest economies, it is fair to ask whether the expenditure of over $400 million by the TICR since the year 2000 on "regional transformation" projects has had the desired transformative effect on the regions...Despite this spending, population in the region continues to decline, wage rates still lag behind the rest of the state, there is persistent high unemployment and poor educational attainment is still endemic.

To quote James A. Bacon at Bacon's Rebellion:

Not only has the Commission failed to "transform" the Southside/Southwest Virginia economy, it has squandered many of its resources. By keeping the old economy on life support, it has failed to steer sufficient resources into the new economy. For all intents, the economies of Southside and Southwest Virginia look very much like they did 10 years ago...

Again, to quote "Where Do All the Welfare Billions Go?" (Human Events, February 6, 1982) M. Stanton Evans points out:

One has to wonder how it is possible to spend these hundreds of billions to alleviate poverty and still have the same number of poor people that we had, say, in 1968...It prompts the more suspicious among us to ask: What happened to the money?...[A] tremendous chunk of these domestic outlays goes to pay the salaries of people who work for and with the federal government - including well-paid civil servants and an array of contractors and "consultants," many of whom have gotten rich from housing programs, "poverty" studies, energy research grants, and the like...

Where did over $400 million go for? I list a lot of it above such as tourism development in Abingdon and the Barter Theatre. What did they approve for 2008?

To again quote Bacon's Rebellion on more education:

"Virginia mill towns, like mill towns everywhere across the United States, lack the size to create knowledge - intensive labor pools. They lack the business clusters that support industry-specific innovation. And they lack the amenities required to recruit, retain and remunerate the highly educated employees needed to run, or start up, successful enterprises...mill towns aren't even in the race..."

"even if the (Tobacco) Commission followed the advice of its blue ribbon study group and invested more heavily in education, it wouldn't make much difference. Tragically, the vast majority of newly educated residents of Southside and Southwest simply would emigrate to metro regions where they could better utilize their skills and make more money. This problem is not unique to non-metropolitan Virginia -- it's a pattern seen across the country."

Letter to the Editor

Letter to the Bristol Herald Courier:

Re: Do The Right Thing With Tobacco Funds. I've said both here and on my website for years just what this report has stated. It has proven me right about the fraud and waste surrounding the Tobacco grants.

With deep respect, the Herald Courier can't seem to connect the dots. Remember the Measure of America on July 20th that ranked SW VA at 400 and E. TN at 421, the bottom 10% in the nation? Bacon's Rebellion is correct in regards to more education. We already have a vast education system in Tri-Cities with lots of college graduates, and they leave in droves for the exact reason he states. So why would doing something that lower-ranked E. TN already does expect to change anything?

Please spare me the Lebanon hype (see Northrop Grumman and AMS-CGI: More jobs or more hype?) and look at reality. Those are government contractor jobs and get tens of millions in corporate welfare, and aren't paying anywhere near what we were told. In addition, there's no public oversight.

Where's the zillions of jobs Bristol was supposed to get from fiber optic that has cost BVU $60 million in debt plus an additional $10 million in Tobacco grants? Their failure is the inability to get the state to shift more taxpayer jobs out to Bristol. Everybody in SW VA can't work for the government! It's already 30% of the workforce in many areas as it is.

The changes they suggest still ignores the endemic political corruption and social apartheid that poisons this region. Will somebody explain how the Barter Theatre, tourism development, etc. qualify as anything less than pork-barrel waste? Look again to lower ranked E. TN with its poverty-wage tourism industry.

The report makes it clear that the $432 million has produced virtually nothing. We better deal with reality!

How about some solutions?

As one regional economic developer pointed out, it's OK to criticise, but what about some solutions? Good question, here is my response. This is part of a discussion with a regional economic developer and I believe what is best for these Tobacco funds and he suggested just that. My goal is to not give people money or a welfare check. And another is to assure poverty doesn't become an industry in itself.

  1. Halt all government money going to EDAs, non-profits, etc. Keep funds out of local hands and keep it clear of local politics.
  2. Setup a general education fund for the region's residents. Pool all the funds going for tourism development, Tobacco grants, etc. into this. Use it as a conditional grants to send the region's residents to school, redo high school, or community college. The focus must be general education, in particular high school math, science and English before any vocational classes or community college. It's open to anyone in the general public regardless of income as long as the funds last and they are in the workforce or employable.
  3. This is voluntary and pays only for books and tuition, no checks and depends on completing a class before they go to the next. The student must be held accountable. They fail to perform they are out. Pay for it through a 2 year degree.
  4. Use existing high schools, community colleges, perhaps empty shell buildings, etc. These must be public institutions, not private diploma mills. (This is not to become a business.) The classes need to be oriented towards jobs or can be used for a job. If a student wants an art class, they pay for it.
  5. If a student has a job, they can come to improve their skills. This would be plus for an established business that needs a better high school graduate.

This system would weed out the lazy and useless unwilling to put forth an effort. This is a direct reward for those willing to strive for it. If an employer is willing to really commit to hiring people from college or vocational programs, I'd be willing to give them some sort of compensation or tax break. But that means if they actually hire them and pay at least $10 an hour to start and keep them for one year. (That excludes bringing in outside workers and also excludes use of temp agencies.) They get it at the end, not before.

I worked with one local business (they paid for it) to improve their workforce skills in basic electricity. It worked well. Beyond that, the taxpayer owes them nothing. They (resident and business) must stand on their own two feet. Get a job, starve, or relocate. End the corporate welfare and pork-barrel waste.



Posted for April 20, 2010: