After being in Tier 2 of a three-tier ranking of the state’s 100 counties based on economic wellbeing the last six years, Wilkes will be a Tier 1 (most distressed) county in 2019-20.
Tier 1 counties are eligible for the most financial assistance through the N.C. Department of Commerce to promote economic development.
Wilkes County’s economic distress ranking went from 50th in 2018-19 to 34th in 2019-20. Under state law, 40 counties are designated Tier 1, 40 are Tier 2 and the other 20 are Tier 3. The county ranked 100th has the least economic distress and the county ranked first has the most.
Each county is ranked from one to 100 in each of four categories, making the highest possible county rank sum 400 and the lowest four. The categories are average monthly jobless rate, median household income, percentage population growth and adjusted property tax base per capita.
Wilkes County’s ranking in each of the four declined (improved) from the periods considered for the 2018-19 report to those for the 2019-20 report.
Wilkes was listed:
• 37th in adjusted property tax base per capita with $82,130 in 2019-20 and 43rd with $81,985 in 2018-19. The statewide property tax base per capita was $109,067 in 2019-20, and $105,257 in 2018-19;
• 33rd in population growth in the 2019-20 ranking with a 0.62% increase from July 2015 to July 2018. Wilkes was 37th in the 2018-19, based on a 0.57% increase from July 2014 to July 2017. Statewide, the population grew 3.58% from July 2015 to July 2018 and 3.46% from July 2014 to July 2017;
• 35th in median household income in the 2019-20 ranking, based on $42,453 in 2017. The prior year, Wilkes was 45th based on $41,640 in 2016. Statewide, median household income was $52,797 in 2017 and $50,995 in 2016;
• 53rd in average monthly jobless rate for 2019-20 with 4.14% from November 2018 to October 2019. Wilkes was 76th in 2018-19 with 3.80% for November 2017 to October 2018. Statewide, the average monthly jobless rate was 3.99% from November 2018 to October 2019 and 4.04% from November 2017 to October 2018.
Before the 2018-19 tier rankings, counties with both populations less than 50,000 and poverty rates averaging at least 19% in the five preceding years, as well as counties with populations less than 12,000, automatically were in Tier 1. A county had to be in Tier 1 at least two years after qualifying.
These adjustors were eliminated starting in 2019 under 2018 legislation.
Caldwell County also went from Tier 2 in 2018-19 (economic distress ranking of 43rd) to Tier 1 in 2019-20 (ranking of 40th). Caldwell’s median household income ranking improved in 2020, but its adjusted property tax base per capita, population growth, and unemployment rate rankings declined. Onslow and Pitt counties also went from Tier 2 to 1.
Surry County went from Tier 2 in 2017-18 to Tier 1 in 2018-19, and back to Tier 2 in 2019-20. It was 34th in economic distress in 2018-19 and 45th in 2019-20. Surry’s jobless rate ranking dropped from 2018-19 to 2019-20, but its adjusted property tax base per capita, population growth and median household income rankings improved. Cleveland, Gates and Hoke counties also went from Tier 1 to 2.
Among other adjoining counties, Watauga (90th) and Iredell (78th) are in Tier 3 and Yadkin (55th), Ashe (63rd), Alleghany (44th) and Alexander (57th) are in Tier 2.
A county’s tier determines eligibility and funding levels for several N.C. Department of Commerce grant programs, including One North Carolina Fund, building reuse, water and sewer infrastructure and Main Street downtown revitalization. Tier 1 counties are eligible for the most support.
Tier placement also plays a role in the state’s performance-based Job Development Investment Grant (JDIG) program, which provides grants to new and expanding companies to help offset costs of locating or expanding facilities.
JDIG funding is determined by multiple factors, including a county’s tier. Companies locating in Tier 1 counties get 100% of incentive grants, while companies in Tier 2 and Tier 3 counties get 90% and 75% respectively. Remaining percentages in Tier 2 and 3 counties go to the state’s Utility Account for infrastructure work.
Factors used to determine funding amounts before a county’s tier is factored include net number of new jobs, wages compared to county average, investment level and if the industry is in one of the targeted sectors. Grant funds are disbursed annually, for up to 12 years, to approved companies after satisfaction of agreed upon performance criteria.
County tier designations determine tax credits for companies for creating new jobs to offset up to 50% of state income or franchise taxes.
In Tier 1 counties, there is a $12,500 tax credit per new job with at least five new jobs and a 7% tax credit for eligible business property expenditures, with no mandatory minimum expenditure.
In Tier 2 counties, there is a $5,000 tax credit per new job with at least 10 jobs and a 5% tax credit for eligible business property expenses over $1 million. In Tier 3, the tax credit is $750 per new job with at least 15 jobs and 3.5% for eligible business property expenses over $2 million.
Employers engaged in manufacturing, motorsports, aircraft maintenance and repair, air courier services, warehousing, customer service call centers, research and development, electronic shopping and mail order houses and information technology are among those eligible for tax credits.
To stay eligible for tax credits, companies must offer employees health insurance and pay at least 50% of the premiums, owe no back taxes and have no significant environmental violations. In Tier 2 and 3 counties, firms must pay certain wages to get tax credits.