By Kristin Fox
Each year, the North Carolina Department of Commerce ranks the economic well-being of the state’s 100 counties and assigns each county a tier designation. The state’s tier system is incorporated into various state programs to encourage economic activity in the less prosperous areas of the state.
Forty counties in the state ranked as the most distressed counties are designated as Tier One, the next 40 as Tier Two and the remaining 20 least distressed as Tier Three. Ten counties experienced enough growth in 2022 to be considered less distressed including one in Western North Carolina.
Swain County is one of these ten counties that will change tiers in 2023. Swain County as well as Avery, Caldwell, Cleveland and Pasquotank Counties, will move to a less distressed tier.
In 2023, Swain County will be designated as a Tier Two shifting up from its prior Tier One ranking. The county’s economic distress rank is #55 from #34 in 2022. According to the state, this shift was largely driven by a change in the county’s population growth rate rank, which moved from #19 last year to #46 this year.
At their December meeting, the Swain County Board of Commissioners discussed the new ranking for the county.
“On black Friday I got a call from the state, and they told me that we were going to be to be a Tier Two and from 34th to 55th,” said Swain County Manager Kevin King. “I strongly disagreed with them, and I questioned them about how can you go from an economically distressed to a transitional county when you have one of the highest poverty rates in the state of North Carolina at 28 percent. This doesn’t make sense.”
“We went over the numbers at a zoom meeting on the following Monday, and I still a hundred percent disagree with them,” he told the board. “We need to get the state representatives involved. I have reached out to both Representative Mike Clampitt and Senator Kevin Corbin.”
“The Tier system in general is antiquated,” said King. “There are four different metrics, and those metrics do not take into consideration a lot of other pieces of the economy. Our unemployment, low at 3.27 giving us a 65th ranking in the state, and our ad valorem taxes with the 2021 revaluation are the two metrics that really spiked and drove us into a Tier Two.”
“We really need to stay on top of that at least for next year,” said King. “There is no way to change it, it’s in the state law what metrics they go by for developing a tier ranking, so it’s going to take the state representative stepping in on our behalf to make an exception because of our uniqueness as a county. As a county, we have so much federal land, and we have the only nationally recognized Indian tribe in our border.”
Being designated as a Tier Two will hurt Swain County on the state level with grant funding as the county will have a higher match amount with the county having to pay more money for grants. This could also influence the county’s budget. However, King stated Swain County is not the lowest on the federal level and is ranked as a transitional state rather than a recessional state.
County tiers are calculated by the state using four factors: average unemployment rate, median household income, percentage growth in population and adjusted property tax base per capita.
Since 2007, North Carolina has used a three-level system for designating county development tiers. The annually rankings determine a variety of state funding opportunities to assist economic development. North Carolina’s County Development Tiers System ranks all 100 of the state’s counties based on economic well-being and relative economic distress.
North Carolina state law lays out the method and timeline through which the Department of Commerce calculates and publishes the annual County Development Tiers. The tiers must be published on or before November 30 of each year and incorporate the most recently available data at the time of its release.
Macon and Jackson County did not progress nor regress in the N.C. Department of Commerce Ranking System for 2023. In 2023, both counties will continue to be ranked as Tier Two counties.
In 2021 Macon County was a Tier Three and had previously been a Tier Two for many years. In 2022, Macon County shifted back down from a Tier Three to a Tier Two ranking. The county’s economic distress rank was #80 in 2022 compared to #84 in 2021. This shift was largely driven by a change in the county’s median household income rank, which moved down from #49 in 2021 to #35 the following year.
Jackson County has been ranked Tier Two for several years. Jackson County has a large number of second homes, and this can play into property taxes and revenue impacting the ranking equation. Other factors such as population growth and the fact that Jackson County has not gained or lost a significant number of permanent residents might also have some impact on the ranking.
The rankings of other counties in western North Carolina include Cherokee and Graham Tier One; Haywood, Clay, Transylvania and Haywood Tier Two; and Buncombe and Henderson Tier Three.
For 2023, Transylvania County is shifting from Tier Three to Tier Two. The county’s economic distress rank is #78 from #84 in 2022. This shift was largely driven by a change in the county’s unemployment rate rank, which moved from #88 last year to #84 this year.
In addition to Transylvania, other counties moving to a more distressed tier include Onslow, Pitt, Randolph and Surry.