Less economically distressed: McDowell moves up from Tier 1 to Tier 2 status

McDowell County’s economic status is on the rise.

On Friday of last week, the N.C. Department of Commerce announced McDowell County is no longer ranked as a Tier 1 county, which is among “the most economically distressed” counties in the state. McDowell is now ranked as a Tier 2, which is less economically distressed, as determined by state commerce officials.

Using a formula outlined in state statutes, the N.C. Department of Commerce gathers required statistics for each of North Carolina’s 100 counties, applies the formula and required adjustments, and assigns a tier designation ranking from one to three. Tier 1 counties are generally the most economically distressed and Tier 3 counties are generally the least economically distressed, according to a news release from the state Commerce Department.

For 2019, 28 counties will change their tier designations. Counties moving to a less distressed tier ranking include Alleghany, Ashe, Camden, Cherokee, Clay, Jackson, Macon, McDowell, Montgomery, Person, Yadkin and Yancey (from Tier 1 to Tier 2); and Currituck and Davie (from Tier 2 to Tier 3).

Chuck Abernathy, executive director of the McDowell Economic Development Association, said several factors went into this improved ranking.

The designations, which are mandated by state law, play a role in several programs that assist in economic development. The rankings are based on an assessment of each county’s unemployment rate, median household income, population growth, and assessed property value per capita. The law calls for 40 counties to be designated as Tier 1, 40 counties to be designated as Tier 2, and 20 counties to be designated Tier 3, according to the state news release.

“Our population growth was very good, at 1.79 percent and we ranked 58th from the bottom, meaning we were in the top 50,” said Abernathy to The McDowell News about the population growth.

McDowell’s household income has improved and just recently, McDowell tied with three other counties with having the second lowest unemployment rate for all of North Carolina.

“Our median household income went up and we ranked 42nd,” said Abernathy to The McDowell News. “Our unemployment (rate), of course, drove that to a big part.”

And McDowell compares well with other Tier 2 counties in the state. “We were 15th from the lowest Tier 2 county, which is pretty good,” he said.

In comparison, other Tier 2 counties close to McDowell include Burke, Caldwell, Avery, Yancey, Catawba, Madison and Polk.

Mitchell, Rutherford and Cleveland are the closest Tier 1 counties to McDowell.

Buncombe, Watauga, Henderson and Haywood are examples of Tier 3 counties that are close to McDowell. A Tier 3 county is the least economically distressed.

There is a downside to being a Tier 2 county. The state provides more grant funding opportunities to Tier 1 counties with the intention it will help them improve their economic standing and their communities as a whole. A Tier 2 county is considered to be stronger economically and therefore, does not need as much help.

Tier designations determine eligibility and guidelines for several different grant programs that N.C. Commerce administers including the One North Carolina Fund, building reuse, water and sewer infrastructure, and the downtown revitalization Main Street program. Tier designations also play a role in the state’s performance-based Job Development Investment Grant (JDIG) program, serving as a mechanism to channel funds for infrastructure improvements to less populated areas of the state, according to the state news release.

“Some of the grants are leveraged stronger for Tier 1 counties but I am of the opinion that from a marketing standpoint, we are better served by being a Tier 2,” said Abernathy.

The recent $15 million grant awarded for the new Old Fort Elementary School is an example. Tier 2 counties are eligible for funding under the Needs Based Public School Capital Fund Grant but the maximum award is $10 million, compared to $15 million for Tier 1.

“Thankfully, the award was made when McDowell County was still at Tier 1 status, so the full $15 million will be available for the Old Fort Elementary replacement project,” said County Manager Ashley Wooten.

Wooten added the change from a Tier 1 to Tier 2 ranking shows McDowell’s economy continues to improve.

“While there can be benefits to having a Tier 1 ranking as it relates to grant funding, it is better to have a healthier economy,” he said to The McDowell News.

“A Tier 2 reflects us to a more accurate degree,” said Abernathy. “We don’t want to be one of the 40 most distressed counties.”

McDowell was previously ranked as a Tier 1 county by the N.C. Department of Commerce around a decade ago. In December 2013, the county’s ranking was raised from Tier 1 to Tier 2, which meant that the local economic condition was improving at that time. But in 2015, McDowell went back to being a Tier 1 and had remained so until Friday.

As of Friday of last week, counties moving to a more distressed tier ranking include Beaufort, Cleveland, Cumberland, Duplin, Hoke, Nash, Rockingham, Rutherford, Sampson, Surry, Wayne, and Wilson (from Tier 2 to Tier 1); and Carteret and Granville (from Tier 3 to Tier 2).

For more information about the tier designation system visit:

nccommerce.com/grants-incentives/county-distress-rankings-tiers.

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