An unwanted status

Published 1:52 pm Thursday, December 4, 2008

By Staff
Once again, Beaufort County has been classified as a Tier 1 county by the North Carolina Department of Commerce.
Once again, that elicits mixed emotions from Beaufort County residents and officials.
Being labeled a Tier 1 county means, for all intents and purposes, being a poor county with little resources to change that status. It also means being eligible for more state-provided resources and assistance to change that status than Tier 2 and Tier 3 counties receive.
Earlier this week, Jim Fain, the state’s commerce secretary, announced the tier designations for 2009. State law requires the 40 counties that are most distressed economically to be designated Tier 1 counties, the middle 40 counties to be classified as Tier 2 counties and the 20 counties that are the most prosperous in the state to be designated as Tier 3 counties.
Even before the existing recession hit, Beaufort County consistently received Tier 1 designations. If the county was economically distressed before the recession hit, there is little doubt the county can look forward to its economic distress worsening.
Although a Tier 1 ranking is something a county would rather not receive, there is a silver lining that comes with that black cloud — assistance from the state.
Using a statutory formula outlined in the 2006 Tax Credits for Growing Businesses (commonly referred to as Article 3J tax credits), the Department of Commerce assembles required statistics for each of the state’s 100 counties, applies the formula and assigns a tier designation ranking from one to three with Tier 1 being the most economically distressed and Tier 3 being the least. Eligible businesses that locate in lower-tiered counties are eligible for larger tax credits than those that locate in higher-ranked areas.
Tier designations determine the available amount of tax credits for job creation and business-property investment in a list of eligible industries, including, but not limited to, manufacturing, motor sports, aircraft maintenance and repair, air courier services, customer-service call centers, warehousing and information technology.
In exchange for the tax credits, all recipient companies are required to offer their employees health insurance and pay at least half of the premiums. They cannot owe back taxes nor have received a significant environmental-violation notice from the Department of Environment and Natural Resources. In Tier 2 and Tier 3 counties, recipients of the tax credits must meet wage requirements.
Those requirements protect the state and the employees. They also help ensure recipients of the tax credits are responsible businesses.
Hyde, Martin and Washington counties also were designated Tier 1 counties. Pitt County is a Tier 2 county, Craven County has a Tier 3 designation. Pamlico County is a Tier 2 county.
The rankings are based on an assessment of each county’s unemployment rate, median household income, population growth and assessed property value per capita. Also, any county with a population of less than 12,000 or a county with a population of fewer than 50,000 residents with 19 percent or more of those people living below the federal poverty level automatically are designated as one of the 40 Tier 1 counties.
A Tier 1 county, one could say, should be appreciative of the assistance the state provides it in an effort to change its tier status. That assistance may not be enough to bring about a change in tier status.
The state performs the job of determining the tier status of its counties and releasing those designations each year. Perhaps the state should find other ways to help Tier 1 counties so when it announces tier designations each year — a few weeks before Christmas — it can hand out some dollars to go along with those tier designations. Recognizing a problem does not always result in that problem being resolved, especially when there is no help provided to solve that problem.
Those dollars should come from money saved by reducing wasteful spending and increasing revenues from sources other than taxes. If state lawmakers and officials would do more than just be aware that Tier 1 counties are economically distressed, such as finding ways to ease that distress, then the Tier 1 counties would have a better chance of changing their tier status.
Maybe it is time to start ranking state legislators and officials on how they help Tier 1 counties ease their economic distress. That could prove distressful for some of those legislators and officials.