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By Josh Bass

Like The Hunger Games books and films of the same name, North Carolina has an economic tiers system where the state capital (Raleigh), makes the districts (counties) compete against one another for resources. A tier one county is considered the most economically distressed, followed by a tier two, with tier three counties considered the most economically prosperous. This system, which we all now live under, started in 1996 with the passage of the William S. Lee Act. It was implemented so the most economically disadvantaged counties could take advantage of a tax credit program. This tax credit program ended in 2014, yet 10 years later the tiers system it created is still in place and is the basis of how many state funds are awarded to local governments. Proponents say that this system is there to create a level playing field for state money and to try to take the politics out of counties to get state money. While that is admirable, it has never really worked as intended.

The time has come for the state legislature to re-evaluate this system. Most would agree that impoverished and struggling counties require more economic assistance from the state government. The question the legislature should ask is if the system is currently working as intended by sending money to the counties that are truly the most in need. Fortunately, House Bill 1044 was recently introduced to study this issue.

One of the four criteria currently used to determine a county’s tier is the percentage growth in the population. This disproportionately harms small-population counties. When you examine the county tiers based on population, Guilford County and Forsyth County come up as tier two counties. Although both counties are moderately economically disadvantaged, they are also home to two of the most populous cities in the state, with Greensboro and Winston-Salem located within these respective locations. While these counties certainly have pockets of economic hardship, I don’t think anyone can truly look at their economic data and say that they are comparable to Jones County or Camden County. In the eastern part of the state are Jones and Camden counties, which were until recently ranked as tier two counties, therefore considered somewhat moderately economically disadvantaged. These counties each have a total population of approximately 10,000 people. The challenge for a small population rural county to provide services is greater than an urban county such as Forsyth or Guilford. Consider Avery County in the mountains. Avery is a relatively small county in the state with a population fewer than 18,000 people. For many years, Avery County was a tier two county, but in 2023 was considered one of the wealthiest counties in the state based upon the tier system criteria.

One of the criteria for the current tier system is population growth as an overall percentage of growth. The population in a rural county is more spread out than concentrated in urban centers of the state. This makes it far more time consuming and costly to provide basic services to those citizens. Camden County, a tier three county, is currently considered to be one of North Carolina’s wealthiest counties. Compare Camden County to Wake County, another tier three county. A recent report shows Wake County adds 62 new residents a day. If Camden County adds 62 people in a year, its population increases by .5%. To clarify, if Camden is having the same population growth as Wake County in real numbers at 62 people a day for one year, its population would triple. So if a low population county, like Camden, adds just a few people, it shows exponentially larger as an overall percentage giving it a higher score. In part, due to this metric, Camden County is considered wealthier as a tier three county than nearby Dare County, with a tier two designation. Dare County receives huge numbers of visitors every year, flocking to its hundred miles of beaches. While Dare County certainly has needs, few people could truly argue that Camden is actually wealthier and in less need of resources than Dare.

One possible fix to the current tiers system would be for the state to decouple program money for the tiers data and to look at the data that is more meaningful for the specific program. For example, if the state wants to help counties with Medicaid, wouldn’t it be better to look at health data rather than economic tiers data? If the goal of the tiers program is to give poorer counties more access to resources, wouldn’t local sales tax collection data be a stronger indicator of local economic resources than the tiers system? If the state wants to look at data to measure the relative income of county populations, would median household income data alone show a clearer picture of this?

It seems that the goal of the state is to help poor rural counties to have better economic advantages. This could be better achieved by helping rural counties build communities that are commercial centers, places where businesses could be built with amenities like high-speed internet, nearby access to healthcare, and the creation of a sense of community around a business hub. This is how many downtown areas function around the state and nation, but many small rural counties do not have a downtown or commercial hub that can easily provide this role.

Come to Northeastern North Carolina to physically see the tier system in action. Pitt County is considered a tier one county, severely economically disadvantaged. Nearby Gates County in 2023 was considered to be much better off financially as a tier two county. Drive through the town of Sunbury, a small rural crossroads in Gates, then drive through the town of Greenville in Pitt, home of East Carolina University, and see where you think there is more economic opportunity. Then go and compare two different tier three counties such as Currituck County and Wake County. Currituck County has an average private sector wage of $41,145. Compare that to Wake County’s average private sector wage of $72,743. If the numbers don’t tell the story it should be clear upon visual inspection. Drive to Sligo in Currituck County with one stoplight, a volunteer fire station, a farm market, and a coffee shop then drive to Cary in Wake County. Cary is home to some of North Carolina’s wealthiest citizens, including at least two recognized billionaires, then determine if the economic opportunity in these two places seems the same.

Has the time come to re-evaluate the state tier system?  If House Bill 1044 is passed and the state studies the tiers system, we may be able to answer this question.

Josh Bass is president of the Currituck Chamber of Commerce.

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