Understanding North Carolina’s County Tier Designations
NC House Bill 1044 - County Tier Designations Study Bill
In the 2023-2024 legislative session, North Carolina lawmakers introduced House Bill 1044, known as the County Tier Designations Study Bill. This bill calls for a comprehensive review of the state’s current county tier designation system, which has been a cornerstone of North Carolina's economic development strategy for years. The goal of the study is to assess the effectiveness of the tier system in promoting balanced economic growth across the state and to explore potential reforms that could better address the unique needs of different communities.
This includes evaluating factors like unemployment rates, income levels, population growth, and economic activity. The findings from this study will help determine whether the existing system continues to serve its intended purpose or if modifications are needed to ensure that all counties, regardless of their economic status, have the opportunity to thrive.
See the full bill - https://www.ncleg.gov/BillLookUp/2023/H1044
(this bill did has yet to be passed by the general assembly)
North Carolina’s County Tier Designations
When it comes to economic development, North Carolina has a unique system in place to help guide resources and support to the areas that need it most. This system, known as the County Tier Designations, plays a crucial role in determining how state incentives and resources are distributed across the state.
What Are County Tier Designations?
Every year, the North Carolina Department of Commerce evaluates the state’s 100 counties and assigns each one a tier designation based on its economic well-being. This system is designed to ensure that state resources are directed where they can have the most impact, particularly in communities facing economic challenges.
The counties are divided into three distinct tiers:
Tier 1: The Most Economically Distressed Counties
Tier 1 counties are those that are considered the most economically distressed. These counties typically struggle with higher unemployment rates, lower income levels, and less economic activity compared to other areas of the state. Because of these challenges, businesses that choose to invest in Tier 1 counties are often eligible for the most substantial state incentives, such as tax breaks and grants. The goal is to encourage job creation and economic growth in areas that need it most.
Tier 2: The Middle Ground
Tier 2 counties are in a middle range in terms of economic health. While they may not face the same level of economic challenges as Tier 1 counties, they still receive support to help stimulate economic growth. These counties might have moderate unemployment rates and income levels, and the state provides incentives to encourage investment and job creation.
Tier 3: The Most Economically Prosperous Counties
On the other end of the spectrum, Tier 3 counties are those that are considered the most economically prosperous. These counties generally enjoy lower unemployment rates, higher income levels, and more economic activity. Because they are less in need of state support, businesses in Tier 3 counties receive the least generous state incentives.
Why Do These Designations Matter?
The tier designations have a significant impact on economic development across North Carolina. They influence a wide range of programs, from tax incentives to grant funding, all aimed at encouraging job creation and investment. By targeting resources to the areas that need them most, the state can help foster balanced economic growth and reduce disparities between different regions.
For businesses looking to invest in North Carolina, understanding the tier system is essential. Not only does it provide insight into the economic landscape of different regions, but it also highlights the opportunities available for state support.