The proposed state budget cuts off any new taxpayer funding to the troubled N.C. Rural Economic Development Center and steers the state toward a new approach on rural assistance.

Legislators, who had previously considered a range of options in regard to Rural Center funding, plan to use a proposed $36 million in the next two years – an amount sought by the state House for the Rural Center – on new rural initiatives under the administration of Gov. Pat McCrory.

Among them:

• A new Rural Economic Development Division in the state Department of Commerce. It would receive $24.2 million over the next two years and its mission would include grant making. It would also handle a one-time $350,000 to assist with extending broadband connections to rural areas.

• A new Water Infrastructure Authority to address critical water needs in rural counties. It would receive $9.5 million over the next two years.

• A new Limited Resource Communities grant program. It would be funded with $2.5 million in the second year of the two-year state budget.

A News & Observer series last month documented a host of problems at the Rural Center, which was created by lawmakers in 1987, including how political influence steered some grants.

A state audit last week found a lack of adequate grant monitoring and a lack of internal financial controls, but auditors said they did not conduct a broader performance review.

Longtime Rural Center president Billy Ray Hall resigned last week.

Curliss: 919-829-4840