THE NORTH CAROLINA General Assembly received a recommendation from a legislative study committee Dec. 14 calling for the “discontinuation of the state’s economic development tier system,” because it is ineffective.
The Carteret County Chamber of Commerce agrees with essential recommendations for the state to abandon the tier system and explore new strategies to assist those communities that are truly economically distressed.
Speaking for the chamber, Past Chair Kerry Youngblood said: “For many years, the chamber has advocated getting rid of North Carolina’s tier system and it is one of our top legislative agenda priorities.”
“The formula has been fundamentally flawed, and it has penalized Carteret County for years and years.”
North Carolina state law mandates that the 40 “most distressed” counties be ranked as Tier 1; 40 counties in the middle be classified as Tier 2 and the 20 “most prosperous” counties to be Tier 3 counties. In practice, eligibility for tax credits, incentives and grant funding has been weighted in favor of Tier 1 and Tier 2 counties.
Dr. Youngblood noted: “Because Carteret County is a resort area with high property values, it is ranked as a Tier 3 high-wealth county, however, in reality, Carteret County is largely a rural county with pockets of acute poverty that are masked by expensive real estate holdings often owned by people who live and work elsewhere.”
In its report to the Joint Legislative Program Evaluation Oversight Committee, the General Assembly Program Evaluation Division said its study determined that the system was not providing the greatest benefit to the most distressed counties. Rather, as a group, the Tier 2 counties were receiving the greatest benefits.
It was revealed that 15 state programs have been using the tier system to distribute state resources. Six are economic development-related programs, but nine are non-economic development programs.
The report recommends that the General Assembly eliminate use of the tier system for all non-economic development programs by July 1, 2017, and end the use of the tier system for all economic development programs by July 1, 2018.
Furthermore, the report suggests that the legislature “establish a commission to reexamine the state’s strategy for identifying and assisting chronically distressed communities.”
Rep. Pat McElraft applauded the report and suggests that the content may just be “the ammunition” needed by legislators to get rid of the tier system.
Mary Carlyle Brown, chair of the chamber’s public & government affairs committee, added: “The chamber’s position all along has been that the state has been using the wrong factors to determine its tier ratings.”
The state considers unemployment rates, median household income, population growth rates and property value per capita.
“We have maintained that wage rates and utilization rates for Social Services programs were significant factors that have been overlooked in assigning the tier ratings,” Brown said. “The best solution will be as the report suggests – to scrap the tier system altogether.
“I would like to see it all happen in 2016 and not put it off for a year or two.”
Mike Wagoner, President
Carteret County Chamber of Commerce