The End of Economic Development Tiers in North Carolina?

<p>In many ways, the system of economic development tiers that North Carolina uses to determine which counties are most in need of state support has never fully lived up to expectations. With the passage of the William S. Lee Act in 1996, the tiers system was applied to all 100 counties in the state. The original intent was to use the tiers to identify the most economically distressed counties that would benefit from higher tax credits being made available to the businesses who locate in those jurisdictions. The policy idea makes complete sense: use a formula to rank all 100 counties based on their level of economic distress and offer larger tax credits to induce businesses to locate in the ones that chronically lag behind. The only problem is that it has never quite seemed to work in practice as originally intended. Could it be time to scrap the economic development tiers system all together and figure out a substantively better way to assist the state’s chronically distressed communities? A new report calls for the state legislature to do just that.</p> <p>For a long time, analysts and policy makers thought that the problem was the formula used to designate a county’s tier status. Many local officials were inevitably unhappy with their county’s respective tier designation in any given year. The thinking was that if we could just get the right distress metrics in the formula, then the policy would work. As a result, the precise composition of the distress formula has been modified and [...]</p>