By Lewis Loflin
The Virginia Tobacco Indemnification and Community Revitalization Commission, established in 1999, was created to promote economic growth and development in tobacco-dependent regions of Southside and Southwest Virginia using funds from the national tobacco settlement. As of 2008, the Commission had awarded 1,049 grants totaling $501.9 million across South Central and Southwest Virginia, alongside $234 million in payments to tobacco growers and quota holders. These funds, derived from tobacco companies rather than taxpayer dollars, aim to support a range of projects, from infrastructure and education to tourism and cultural initiatives. However, the Commission’s impact on the region’s economy has been a subject of ongoing debate, as reflected in public comments and internal reviews.
The following exchange is excerpted from the minutes of the Full Tobacco Commission Meeting held on Thursday, July 31, 2008, at the Holiday Inn in Bristol, Virginia:
MR. HAWKINS: "Is there anyone who would like to make a comment, this is the public comment period, or questions? Please identify yourself. I would ask you to brief, if you would, because we have some planes to catch."
MR. LOFLIN:
My name is Lewis Loflin, and I'm a resident of Bristol, Virginia, and what I do is track what our state government is doing with tax dollars. A number of these projects I have seen in person, and I also have an extensive amount of paperwork on the Tobacco Commission. With all due respect, there is still a problem with accountability. I spent Friday at the Remote Area Medical event in Wise. All this money, $452 million, is mostly going to fund Industrial Development Authorities (IDAs), and it seems on the outside it's primarily supporting government bureaucrats, consultants, and contractors.
For the ninth straight year, we’ve set a poverty record. I noticed most of the license plates at the event were from Virginia residents. It's not like two-thirds of them are coming from West Virginia. They are Virginia residents. How many jobs do tobacco farmers have that the Barter Theater created? What do these kinds of projects do for a typical man or woman who lives in this district who needs to earn a decent living? Thank you.
MR. HAWKINS:
I think your comments are well placed, and I certainly understand your concern. We've always had a concern about making sure that what we did was long-term stability in the community, and we’re always pleased to have comments from the public. The monies we're dealing with are really not tax dollars, and they are moneys that tobacco companies are sending to us through the state, so it's not taxable money, as such. That's something we always have to be aware of.
The other part about the Barter Theater, other things may not have a direct impact on jobs, but they bring to an area a certain identity and a certain quality of life that will attract investments in outside communities that may not be there without that type of investment. There are people in large corporations that when they look at a community, they look at quality of life, they look at the aspect of the cultural life of the community, and the Barter Theater is a major attraction for the State of Virginia, and it's done a lot for us.
We tried to raise the standard of living for the entire community and invest as best we can in the future. Most of what we've done, and particularly the scholarships and the many jobs that have been created, there are thousands of jobs that have been created directly from things we've put into play, that change the dynamics of our communities, and hopefully by the next generation we will have a better educated workforce and be able to address the economies this time and this place. Your continued vigilance of looking at us is good, because we try to be as transparent as possible. I look forward to working with you, and if you have any comments, please let me know, and thank you for being here.
MR. LOFLIN: I appreciate it, sir.
The concerns raised by Mr. Loflin echo findings from internal and external reviews of the Tobacco Commission. According to the Richmond Times-Dispatch (July 20, 2008):
Yet the state-appointed commission that doles out the money has not adopted methods of measuring its overall return on investment, an outside group that reviewed the spending noted in a recent report that suggests it do so. The tobacco commission may consider what recommendations to adopt at its next meeting, scheduled for July 31 in Bristol...
The review panel suggested eliminating the formula to target more money for regional projects. It also recommended that the commission put more resources into providing access to higher education for residents of rural areas, noting that "increasing the education levels of young people and adults is the only long-term answer that will lead to economic transformation."
The panel also suggested that the commission is too large and its committee structure is unwieldy. It has nine committees, all but one of them led by a member of the General Assembly, which the panel said has possibly encouraged some grant applicants to shop around among committees for funding."It's a good report," said chairman Hawkins, adding that he agrees with some of the recommendations...
An internal audit of the Virginia Tobacco Commission in 2008 further highlighted the challenges:
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.
These findings indicate that, despite significant investments, the Commission’s efforts had not yet achieved the transformative economic impact envisioned at its founding. Projects like the $17 million Heartwood cultural tourism center in Abingdon, which opened in 2011 but failed to achieve economic sustainability, and the $1–$2 million grants to the Carter Family Fold, reflect similar challenges in delivering measurable economic benefits (see Ralph Stanley Museum).
Terry Kilgore, a founding member of the Commission in 1999 and its vice chairman by 2008, played a significant role in its operations. Representing Virginia’s 1st District (Scott County, Lee County, and parts of Washington and Wise Counties), Kilgore has been a key advocate for the Commission’s initiatives. In 2009, he announced $16.3 million in technology grants for the state, with $8.4 million allocated to Southwest Virginia projects (Times-News, January 15, 2009). Notable allocations included:
These fiber-optic projects aimed to improve internet connectivity, a critical factor for economic development in rural areas. However, similar initiatives, such as the Bristol Virginia Utilities (BVU) fiber-optic project, which received $10 million in Tobacco grants but accrued $60 million in debt, have faced criticism for failing to deliver the promised job growth (see Virginia Tobacco Commission: Spending and Impact).
The Tobacco Commission’s mission to promote economic growth has been complicated by systemic issues in Southwest Virginia. The 2008 Blue Ribbon Commission report noted that over $700 million in regional investments by 2010 failed to reverse population decline, high unemployment, or low educational attainment. In Dickenson County, for example, the 2023 population was 13,725, with a 1.2% annual decline since 2010, a median household income of $38,940 (versus Virginia’s $87,249), and a poverty rate of 22.1%—nearly double the state’s 10.6% (U.S. Census Bureau, 2023). These statistics underscore the difficulty of achieving economic transformation in a region heavily reliant on declining industries like coal.
Transparency remains a concern, as the 2008 review panel noted the lack of methods to measure return on investment. The Commission’s structure, with nine committees largely led by General Assembly members, has also raised questions about potential favoritism in grant allocations. Despite these challenges, the Commission has supported initiatives like scholarships and workforce training, which Chairman Hawkins cited as contributing to thousands of jobs. Yet, the long-term impact on the region’s economy remains uncertain, as educational improvements often lead to out-migration rather than local job growth, according to Bacon’s Rebellion (2008).
The Virginia Tobacco Commission has invested heavily in Southwest Virginia since 1999, with $501.9 million in grants and $234 million in payments to tobacco growers. While projects like fiber-optic expansions and cultural initiatives aim to foster economic growth, internal audits and public comments reveal ongoing challenges in achieving measurable impact. Addressing transparency, refining investment strategies, and focusing on sustainable job creation remain critical for the Commission to fulfill its mission in a region facing deep-rooted economic and educational hurdles.
Acknowledgment: I'd like to thank Grok, an AI by xAI, for assisting in drafting and refining this article. The final content and perspective are my own.
