Three coastal counties have been ranked as more economically distressed than they were last year, while one – Currituck — is ranked as the least distressed in the state for the third consecutive year.
The North Carolina Department of Commerce published Nov. 29 the “2024 North Carolina Development Tier Designations,” a ranking of all 100 counties every year based on economic well-being and relative economic distress.
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Currituck County Manager Ike McRee told Coastal Review Thursday that he questions the validity of this ranking system, especially as the county’s population grows.
David Rhoades, the Commerce’s communications director, explained to Coastal Review the tier system is incorporated into various state programs to encourage economic activity in the less prosperous areas of the state.
Tier 1 counties are the most distressed and ranked 1 to 40, counties 41 to 80 are considered Tier 2, and the least distressed 20 counties are in Tier 3, ranked 81-100, according to the website.
On the coast, Beaufort is ranked for 2024 at 34, Gates at 38 and Pasquotank as 31, all moving from Tier 2 to Tier 1 counties, joining Hertford ranked at No. 3, Bertie at No. 7, Chowan at No. 37, Hyde at No. 19, Onslow at No. 38, Tyrrell at No. 16 and Washington at No. 8. Tier two counties include Perquimans ranked at No. 42, Craven at No. 58, Pamlico at No. 68, and Dare at No. 80, which has the highest adjusted property tax base per capita for 2023-24 at $446,844.
Brunswick County had the highest population growth at 14.15%, while Hyde had the lowest, a decline of 6.49%.
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Rhoades said that four equally weighted factors are used to calculate the tiers each year. These factors are average unemployment rate for the most recent 12 months, median household income for the most recent 12 months data are available, adjusted property tax base per capita for the most recent taxable year, and population growth for the previous three years.
When asked how second homes, which are many along the coast, affect the criteria, Rhoades explained that one of the economic factors that go into the calculation is the property tax base per capita of the county, and “the tax value of all properties in a county does play a role in the Tiers system.”
Rhoades said a resident may not feel much difference in their daily life from tier designation, but the tiers can impact the economic development strategies that local leaders employ. Tier 1 counties facing more economic distress can take advantage of more favorable terms and conditions from programs that tie their benefits to the tier system.
“Generally speaking, various state programs provide greater benefits to counties facing more economic distress. For example, the One North Carolina Fund, which is an incentive program administered by our department, requires a local funding match. The required terms of that match are more favorable for Tier 1 counties, where the local government only must match $1 for every $3 state dollars provided. In Tier 3 counties, local governments must match one for one each state dollar provided,” he said.
Currituck County is ranked 100, or least distressed, with an adjusted property tax base per capita for 2023-24 at $266,474, according to the department. The population growth for July 2019 to July 2022 is listed as 12.77% with a median income for 2021 of $82,759, the fourth-highest median household income, behind Wake, Union and Chatham, in that order. Unemployment from October 2022 to September 2023 was 3.2%.
McRee said the county had a 10.4% increase in population from 2020 to 2022, which ranked Currituck the second-fastest-growing county in North Carolina, and from 2010 to 2020, the county experienced a 20.2% increase in population over that decade, ranking it as the seventh-fastest-growing county in the state.
“We continue to question the validity of the criteria used by the Department of Commerce and the result of that criteria use, because it’s kind of befuddling to believe that Currituck County in rural northeastern North Carolina is the least economically distressed county of all counties in the state,” he said. “Less distressed than Wake, Mecklenburg, Guilford, Pitt, I mean, it just doesn’t make any sense to us.”
McRee added that they’re trying to get the North Carolina General Assembly to at least study and determine whether this criteria is “really fair and applicable to what is in essence, a rural county.”
The consequence of being ranked as least distressed is the county is not eligible for multiple state grants, he continued.
“We’re grateful to be an attractive, viable county, especially in northeastern North Carolina when so many counties are losing population,” McRee said, but the county’s growth increases the demand for services, such as fire, EMS, law enforcement, but particularly schools.
Currituck has been denied school construction grants, though some neighboring counties have received $30 million or more. “What we’re now having to do is construct with 100% Currituck County funds a $60 million elementary school at the north end of our county to keep up with our population growth,” he said.
What else could be an issue for Currituck is being a coastal county with a large number of absentee property owners with extremely high-value homes on the Currituck Outer Banks, and that should be taken into consideration, he said.
“It appears to us and they need to reevaluate the criteria they’re going to use to determine whether a county is economically distressed or not,” he said.
For Pasquotank, the county’s economic distress rank is No. 31, moving from No. 43 in 2023.
Pasquotank County Assistant Manager John Shannon told Coastal Review Thursday that it was not unexpected for the county to return to Tier 1, which it has been ranked since 2014, minus last year.
“Pasquotank County has historically been grouped into Tier 1,” Shannon said, “with 2023 being more of an outlier.”
Pasquotank’s adjusted property tax for 2023-24 is $94,016, population growth July 2019 to July 2022 was 1.35%, median income for 2021 is $51,365, and unemployment is 4.24%.
“This shift was largely driven by a change in the county’s median household income rank, which moved from #73 last year to #45 this year,” according to the department. The median household income numbers used for last year were $56,654.
Shannon said that the county has currently not researched the specifics of the change in the median household income rank from year to year.
Gates County, which experienced a population decline of 2.4%, is ranked as No. 38 for 2024, moving from No. 41 in 2023. This shift was largely driven by a change in the county’s unemployment rate rank, which moved from No. 73 last year at 3.29% to No. 60 this year, at 3.38%, officials said. The adjusted property tax base per capita for 2023-2024 is $93,952.
Manager Scott Sauer noted that the county’s median household income is $59,762, positioning Gates County near the first quarter of the 100 counties, or 72 out of 100, where 1 is the most distressed.
“One explanation for this higher-than-expected rating (72) is Gates County’s proximity to the Tidewater Virginia, area of Norfolk, Chesapeake, and Virginia Beach where many of our residents are employed,” he said in an email, adding that the county was tier two from 2020 until last year.
Sauer said he has had the opportunity and the honor since 1991 to serve in Caswell, Scotland, Sampson, Harnett, Bertie and Gates counties, and “Statistical rankings do not provide an accurate measure of economic standing.”
Though there is no chain grocery store, no hospital, no community college facility or satellite campus, and only one electric vehicle charging station for the many Tesla owners, “in Gates County, we enjoy a beautiful and pristine environment for fishing, water recreation and hunting — and Merchants Millpond State Park which just celebrated 75 years of operation,” he said.
“Our residents enjoy safe neighborhoods and safe schools, which are a valuable resource by any rational measure. Agriculture and timber production are the economic engines for Gates County and this region, and we continue to innovate and grow stronger each year,” Sauer continued.
Gates County is ninth in cotton production out of North Carolina’s 100 counties, and the opportunities for ecotourism, heritage tourism, agritourism, entrepreneurs, and small businesses are seemingly endless.
“Gates County’s designation as a Tier 1 county is good news from my perspective and can be beneficial as we strive to qualify for grant opportunities to better serve our residents and taxpayers,” Sauer said. “And as a tier one county we remain in good company — with Pitt County (and ECU), with Cumberland County (and Fort Bragg), with Wayne County (and Seymour Johnson Air Station) and Onslow County (with Camp Lejeune) just to name a few.”
Beaufort County’s economic distress rank is No. 34, moving from No. 45 in 2023. The shift was largely driven by a change in the county’s unemployment rate rank, which moved from No. 43 last year at 3.77% to No. 34 this year, at 3.91%, officials said.
Beaufort County Economic Development Director Brad Hufford said that most of the county’s neighbors are Tier 1.
“While not a perfect system for determining economic strength and weakness, it is the system the state uses, and we will take full advantage of the opportunity it presents,” Hufford told Coastal Review in an email. “Our tier ranking opens us up to some opportunities with state funding such as preferential grant treatment and the lowering or waiving of local matching requirements for some grants. The system was designed to help address the needs of Tier 1 communities and help them improve their economic ranking in the future. Because the ranking system is the way it is, there will always be a new batch of Tier 1 counties even if the rising tide lifts all boats generally.”
He said that the county has been historically closer to a Tier 1.
“During the pandemic, our county performed better on the four factors than many of the other counties, with us holding steady while they had a more drastic cut off due to the pandemic,” Hufford said in an email. “For 2021-2023 we were a Tier 2, since the ranking system is not in a vacuum but is determined by the order of other counties. In order to make a sustained or permanent leap out of Tier 1 status, there has to be some fundamental economic and population growth in the county, like what has happened in the suburban counties around major metros in the state.”
Sadly, he continued, northeastern North Carolina and coastal communities largely have not seen these types of changes like the rest of the state.
Beaufort County’s unemployment rate went from 3.77% in 2023 to 3.91% for 2024, which is not too drastic of a change.
“It is just that compared to all the other 99 counties in NC, our new unemployment rate grew while the other counties dipped. We did have a small business closure and one of our company’s put staff on a brief furlough, so besides normal attrition, that might have accounted for some of the unemployment rate change,” he said.
Historically, the region has had most of the Tier 1, economically distressed counties, with only small pockets existing in the Piedmont and mountains.
“Looking at the map, you see the large swath of contiguous Tier 1 counties. I think the region has been slower to make the change from an agriculture-based economy. There was already more industry in the middle part of the state and population there, so we were at a disadvantage. I think the state needs to have some fundamental push to encourage economic growth in our area,” Hufford said. “I think with all the success and new industry occurring on the 85 corridor and around the metros, it is creating growing pains in communities dealing with people moving to NC. To me our region offers a great opportunity to balance that growth and extend prosperity east. Of course, the coast has a great quality of life and reputation as a vacation destination, but we need more economic diversity and population growth to balance for long term change.”
