Lincoln County should receive more support from the state when landing industries next year, thanks to a shift in economic-development tier rankings that will make bigger tax credits available.
The N.C. Department of Commerce announced the new tier designations last week for all 100 North Carolina counties. Currently mandated by state law, the rankings determine a variety of state funding opportunities to assist in economic development and are issued annually.
Lincoln County is one of 12 counties changing tiers next year, moving from “Tier 3″ to “Tier 2″.
The law calls for the 40 most distressed counties to become Tier 1 counties, the next 40 counties to be designated as Tier 2 and the 20 most prosperous counties to become Tier 3 counties. Eligible businesses that locate in lower-tiered counties are eligible for some grant programs and larger tax credits than those that locate in higher-ranked areas.
County officials say the move should make the county more competitive when it comes to industry recruitment.
Crystal Gettys, business development manager for the Lincoln Economic Development Association, told the Times-News this week that the announcement is “excellent news,” saying she expects there will be an uptick in projects in the coming year now.
“It will help us get an edge,” she added.
Gettys said some companies won’t even consider locating in counties designated as Tier 3. She believes that Lincoln County returning to Tier 2, as it was until last year, will add to its momentum in landing new industries.
However, Gettys is among those calling for a review of the rankings, particularly in how the economic statuses are determined.
She, along with various other local officials, have stated that they believe the tier system warrants reform, with some even recommending it be done away with all together.
Potential benefits to companies in Tier 2 counties include: a $5,000 tax credit per new job, with a requirement to create at least 10 jobs, and a 5 percent tax credit for eligible business-property expenditures of more than $1 million.
The rankings are based on an assessment of each county’s unemployment rate, median household income, population growth and assessed property value per capita. In addition, any county with a population of less than 12,000 or a county with a population of fewer than 50,000 residents, with 19 percent or more of those people living below the federal poverty level, automatically are designated as among the most distressed counties.
Former LEDA Executive Director Barry Matherly told the Times-News last year, upon Lincoln County being labeled one of the 20 most prosperous counties in the state and therefore relegated to be shut off from larger state incentives, that he believed the designations artificially handicap those counties that are driving prosperity. Likewise, they force counties to compete with each other, in addition to other states, he said.
“Our mission is to improve the economic well-being and quality of life for all North Carolinians,” N.C. Commerce Secretary Keith Crisco stated in the release announcing the rankings.
“We want all of our residents to have good jobs regardless of where they live in the state. These tier rankings provide important tools that help attract and retain businesses in all parts of North Carolina.”
Using a statutory formula outlined in the 2006 Tax Credits for Growing Businesses (more commonly referred to as Article 3J tax credits), the Department of Commerce assembles required statistics for each of North Carolina’s 100 counties, applies the formula and assigns a tier designation ranking from one to three, the release noted.