TJCOG Report Highlights Sub-County Economic Distress Overlooked by NC Tier System

Durham, NC, March 2019 - A new Triangle J Council of Government policy report, Hidden Distress: An Analysis of North Carolina County Tier Designations, finds that the current North Carolina tier system designations of economic distress overlook high levels of economic distress that exist at a sub-county level. Six of the seven counties in the TJCOG region are designated as Tier 3 counties, a designation that indicates the counties are among the 20 least economically distressed in the state. However, within these counties, there are fifteen municipalities almost entirely within low-income census tracts.
 
 
This statistic is important, as median household income is one of the four factors used to designate tier status by the state. Sub-county distress is glaringly obvious when examined through this factor. For example, in Moore County, the median household income is $51,873. In the Town of Robbins, located within Moore County, the estimated median household income is closer to $25,000. Poverty rate, while not currently a factor used for designation, also displays the contrasting levels of economic distress in the region. While Johnston County has a poverty rate of 14.6%, the Town of Selma has an estimated poverty rate between 30% and 45%.
 
 
These concentrations of hidden distress are not limited to rural communities. In Wake County, one census tract with a population exceeding 5,000 has an estimated poverty rate of 41.4% and an estimated median household income that is nearly half of Raleigh's household income. This is only one such example. These findings align with a report from the Center for Urban and Rural Studies at UNC-Chapel Hill which found 65% of North Carolina's severely distressed census tracts exist within urban areas.
 
Currently, the tier system designations are used to allocate funding for eleven state programs and are unofficially used in a myriad of other public and private funding opportunities state-wide. The range of programs utilizing the designations further contributes to the growing inequality between distressed communities and their neighboring jurisdictions. These communities, such as Robbins and Selma, have limited eligibility for critical funds, including the Industrial Development Fund Utility Account and Economic Infrastructure Program. This investment strategy is also at odds with many new programs coming from the federal government, including the highly anticipated Opportunity Zone program which aims to encourage investment in census tracts that are classified as low-income or bordering low-income tracts.
 
While the tier system is intended to encourage economic activity in struggling communities, the current designations leave many severely distressed communities behind. The report identifies four recommended actions for the state to improve the current tier system, one short- term change and three long-term changes. The recommendations include the following:
  1. The creation of an exception rule for municipalities significantly located within low-income census tracts, a rule that mirrors existing state program exceptions.
  2. The adoption of new indicators of economic distress that are focused solely on the economic well-being of the population.
  3. The redesign of the tier system to operate as a census tract-based index updated every five years to better represent economic changes over time.
  4. The release of multiple indices of economic distress to allow state-wide programs to use an index most suitable to their respective goals.
This report was unanimously endorsed by the organization's Executive Committee at their February 23 meeting. A summary of this information can be found here.