By Paige Winfield Cunningham

Safe from Virginia’s budget woes and relatively sheltered from the recession, a cushy tobacco fund in southern Virginia is fueling diverse projects like cordless electric cars and broadband expansion.

Lawmakers grappling with revenue shortfalls resisted the urge to steal from the $536 million endowment managed by the Virginia Tobacco Indemnification and Community Revitalization Commission. Like Tennessee, Michigan and other states who have used their proceeds from the national tobacco settlement to plug budget deficits, some Virginia legislators floated the idea during budget discussions, said Sen. Walter Stosch, a member of the Senate Finance Committee.

Talks of a one-time cash withdrawal from the endowment fund never turned into actual legislation—and fortunately so, according to Stosch.

“There was some idle talk among some Senate and House budget conferees during the budget conference, but the idea was not well-received by the remainder of us,” Stosch said, in an email. “Frankly, when budget cuts need to be made, you cannot solve the problem by one-time moneys.”

While legislators agree filling state budget holes is outside the commission’s scope, its 31-member board was nonetheless given a broad range of activity when it was formed using proceeds from the national tobacco settlement.

Created in 1999 under former Gov. Jim Gilmore, the body has two missions: to compensate tobacco farmers who were damaged by withdraw of federal support and to aid economic growth in tobacco-dependent communities, said Executive Director Neal Noyes.

“Gilmore did provide a very broad latitude in determining how best to do that,” Noyes said.

A $1.25 million grant to commercially develop cordless charging stations for electric cars is a recent example of that latitude. It was awarded last month to Wythe developers Tom and Rebecca Hough, who have designed a parking-block-like charger that automatically starts when a car is driven over it. The Houghs hope to begin producing their invention in December.

The grant is part of a new research and development initiative started by the commission last year.

Under the initiative, the commission is funding two more R&D projects. One goes to Martinsville, where Richmond-based Intrinergy will test more efficient process method to turn wood into energy through a process called torrefaction. The other goes to Dan River Business Development Center in Danville, where fiber optic strands will be produced for infrared technology that can sense missiles and fighter jets.

Expanding into R&D is, at the 50,000-foot level, an effort to bring corporate and university research into the tobacco region for the first time, said Tim Pfohl, grants program administration director.

“If you have more PhD’s in your community, it’s going to raise the collective IQ and will start to raise things like standards of public schools,” Pfohl said.

But it’s easier to see how the R&D grants would further the original goal of the commission—to enhance the economies of tobacco communities—through its more concrete objective: to bring mass production to the area.

“We’re hoping that by providing these incentives that people will, when they get beyond these final stages of research, that they’ll mass produce in the tobacco region,” Pfohl said.

In that vein, the commission is partnering with the Virginia Economic Development Partnership to scan the area for sites to house megaprojects like auto assembly plants, food manufacturing or data storage facilities.

Pfohl said the goal is to find ways to equip sites with water, power and transport options to shorten the time between when a company identifies a location for a plant and is ready to start building.

“It’s to have the ready-to-go, served sites so the private company can get in the marketplace as quickly as possible,” he said.

There’s no question the commission has invested heavily in the state’s tobacco region, which includes the western and center area of southern Virginia from Sussex County in the east, up to Buckingham and Cumberland counties to the north.

Since its inception, the body has awarded more than $660.7 million in grants across the tobacco region and provided $234 million in indemnification payments to tobacco growers and quota holders, according to the commission’s website. The commission’s 2011 budget is $98 million.

At its highest point, the endowment reached nearly $800 million, but dropped as the board withdrew revenues each year to fund its budget. The cache would have constituted an attractive sum to cash-strapped state agencies, but Noyes wasn’t approached by any of them because of tough times, he said.

But Director of Finance Stephanie Kim said she could anticipate that happening since the commission works closely with agencies like the Department of Businesses Assistance and community colleges.

“We worked with a lot of other state agencies,” Kim said. “If they don’t have funds, they’re going to turn to us.”