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Saine: State’s tier system for economic incentives is shorting Lincoln County

ELIZABETH HEFFNER

Staff Writer

According to the North Carolina Commerce Department’s 2014 County Development Tier Designation Report, Lincoln County is now among the 20 most prosperous counties in the state.

The state divided its 100 counties into three development tiers, with Tier 3 being the best and Tier 1 the worst. Tier development rankings are based on four factors: adjusted property tax base per capita, population growth, median household income and average unemployment rate.

Based on this tier system, the better a county is doing, the less money the state will give. Automatic qualifiers for a Tier 1 designation include a county with a population less than 12,000 people or a county with a population between 12,000 and 49,999 along with a poverty rate of 19 percent or greater. A county with a population between 12,000 and 49,999 is automatically qualified for a Tier 2 designation.

Lincoln County returned to a Tier 3 ranking with a change in overall rank from 80th to 83th place.  Although the county’s population growth rank fell from 26th to 29th place, three of its four development factors improved. The report states that the largest contributor to the county’s tier change was an increase in median household income from $45,332 to $50,746. This moved the county’s rank from 18th to eighth position.

Not everyone is pleased with the state’s tier system. According to Lincolnton-Lincoln County Chamber of Commerce President Ken Kindley, the tier system is desperately in need of revisions.

“I believe Rep. Jason Saine should lobby to do away with Tier 3, because compared to [the incentives] offered in Tier 1 and 2, it’s not even close to being competitive,” Kindley said.

He said new employers who created jobs in counties with a Tier 1 distinction receive approximately $12,500 per industrial job. In Tier 2, employers receive $5,000 per industrial job, and in Tier 3, employers receive $750 per job.

“We’re really not getting help from the state,” Kindley said. “It’s like we’re being punished for our success after working hard over the past 15 years.”

Saine has similar sentiments, stating the county’s Tier 3 distinction is essentially “a backhanded compliment.”

“Kindley hit the mark in stating that we’re doing some good work on our end,” Saine said. “But they’re using an unfair way of distributing incentives that’s antiquated. It might have worked for us at one point, but in this changing economy, it doesn’t anymore.”

Saine believes a reform of the state incentive program is necessary to maintain a level playing field for all counties.

“We could have identical sites five miles apart in different counties,” he explains. “But if the incentive package in better in the other county, [Lincoln] will lose that industry.”

Saine believes a case-by-case basis approach could be more effective for the state.

“We’ve got great schools, a reasonable tax rate and an ideal location,” Saine said. “But we get penalized because of the difference in tier incentives.”

Other counties such as Cherokee, Guiford, McDowell, Wilkes and Yancey also moved to a less distressed tier for 2014, while seven counties moved to a more distressed. Beaufort, Greene, Pasquotank, Perquimans and Surry counties moved from Tier 2 to Tier 1, while Franklin and Haywood counties moved from Tier 3 to Tier 2.

North Carolina has used the three-level system to designate development tiers since 2007.

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