As the saying goes there are Lies, Damnable Lies and Statistics and it is the latter of these three arguments that have put some fiscally conservative counties, particularly rural communities, in a position that will restrain state financial support in the coming year.

Last week the North Carolina Department of Commerce (NCDOC) released economic rankings for counties statewide and once again county officials, particularly in rural low wealth counties, were left wondering how these rankings have any sense of logic or credibility. These rankings are more than symbolic for the counties; they impact access to state funds and special programs such as the state’s broadband initiative to bring high speed internet to rural communities.

Each year the NCDOC publishes a ranking of counties based on four criteria, unemployment, household income, population growth and property values. Using the comparative results the commerce department divides the counties into groups. Forty counties with the lowest numbers recorded for the past year, in year over year comparison, are grouped in Tier 1 or the most economically stressed category. The next 40 counties are designated Tier 2 and the remaining 20 counties are relegated to Tier 3 for the most economically sound status.

The rankings give the state’s commerce department a means for prioritizing attention when businesses or manufacturers are looking to expand in the state. Using the tiers as guidance, the NCDOC can justify financial assistance to companies willing to locate in distressed counties. That assistance is adjusted based on the economics of the counties that are designated for the expansion or relocation of the business. Among the services that can benefit from NCDOC support are public utilities as well as direct cash to the county under consideration.

Carteret is one such county that saw its ranking by the (NCDOC) raised from tier 2 to the highest, most successful level of tier 3. The reason for this new position is because of its low tax rates, low unemployment numbers in comparison to other counties statewide, and its conservative fiscal policies.

But on casual examination there is something amiss in this ranking procedure when comparing how counties suddenly find themselves bumped up in ranking while other, far more prosperous counties benefited from a drop in their relative position.

Carteret County has historically ranked as a Tier 3 county which includes Mecklenburg, Wake, Durham, Johnston counties and New Hanover. After several years of review, Carteret County was dropped to a Tier 2 county only to be raised again this year to the top tier. But our county’s experience pales in comparison with other counties across the state.

In the case of Camden County, located in the northeastern corner of the state, the ranking process is particularly ridiculous. With a population of 10,869, an average household income of $35,078 and a county budget of just $13.3 million, Camden County was also upgraded to Tier 3 status.

At the same time the increase in ranking occurred for Carteret and Camden counties, New Hanover, formerly a Tier 3 county was downgraded to Tier 2 because year over year, that county had experienced greater declines in the four criteria used by the state’s commerce department.

When considering the economic vibrancy and sustainability of New Hanover to either Carteret or Camden counties, there is a big disparity. New Hanover lists in its economic inventory a major university, UNC-W; an active film industry that already benefits from state grants; the state’s primary port facility; a thriving manufacturing center and a successful tourism industry due to very popular beaches. Considering the county’s population of 236,690, its average household income of $44,620 and a county budget of $399.6 million, there is no comparison with the other two coastal counties that are now ranked on a higher economic scale.

The reduction to a Tier 2 ranking for New Hanover County while Carteret and Camden counties moved up the scale to a higher Tier 3 level, is indefensible. The basic numbers of population, household income and county budgets are stark indications that the metrics being used do not give a true economic ranking.

Considering just these three examples, and there are many more, in the wide disparity of county economics and the dysfunctional metrics for establishing economic rankings, it is time for the legislature and the NCDOC to revisit the state’s criteria. There is real money at stake and the rural counties deserve better recognition.

(2) comments

mpjeep

For 2019/2020, Carteret County officials celebrated the reclassification from a Tier three county to a Tier two. Guess no celebration for 2021.

In December 2018, Town Manager Burns said: “I don’t know of any disadvantages”, speaking of being downgraded to a Tier 2 classification. “It should also help with some additional school funding programs”. And Carteret County Schools Superintendent Mat Bottoms said “What we found is that it will help get $20,000 toward MaST”.

Lower Tier counties have more access to state funding for revitalization, building reuse, childcare subsidies, and general infrastructure. Counties that improve their rankings often feel penalized.

The importance of economic distress designations, mandated by state law, is that they determine eligibility for several different grant programs that assist in economic development. If you're trying to build a case for funding sources, the more distressed you are, the greater the likelihood of receiving it. Tier 1 counties the state provides $3 for every $1 in local economic financing, Tier 2 counties get $2 for every $1 and Tier 3 counties continue to get a $1 for $1 match.

The adjusted valuation on vacation properties is a major reason why some coastal counties have a higher ranking than their neighbors, but high property values don’t always equate to a higher living. Many coastal counties have high property values, but lower wage service jobs.

And tourism has an effect on Tier designation.

Many feel the tier system should be revamped, but Tier one and Tier two counties don’t want it changed. Businesses looking to relocate to NC would qualify for less incentives in a Tier 3 county than a Tier 1 or 2. Covid-19 unemployment numbers is the reason given for Brunswick and New Hanover counties moving down to Tier 2.

The system is not a good representation of the entire community, given the fact that some areas of a county may have experienced a boom while other parts have not. The fact there are pockets of wealth or poverty in some areas of a county that the Tier system does not take into account.

To protect the state’s smallest counties, the legislature built in a provision that automatically classifies every county with less than 12,000 residents as Tier 1, regardless of economic conditions.

I agree, it is time for the legislature and the NCDOC to revisit the state’s criteria.

DeadBolt

Hmmmmm, yep, its a funding game! (neither designation hits the freemarket wallet of typical local businesses , i suppose? Lets see, um, "Hey honey, when we vacation this year, um, we really need to research the place to ensure it's a TIER3 area, ok?" hahahahahahahaha

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