Time for a Rethink: Research Reveals Gaps in North Carolina's County Economic Tier System

The ncIMPACT Initiative and NCGrowth partnered to assess the effectiveness of North Carolina’s County Tier System, which ranks counties from most (Tier 1) to least (Tier 3) economically distressed. Originally designed to guide job creation tax incentives, the system now influences major policy decisions - from school funding allocations to loan forgiveness for healthcare providers. As its use has expanded, questions have emerged about whether the current methodology remains well-suited for these broader applications.

Through extensive background research and stakeholder interviews, the ncIMPACT team examined the variables used in the tier designation formula and gathered real-world perspectives from those who work closely with the system. This approach combined quantitative and qualitative data, which provided a deeper look at how well the tiers identify communities with the most critical economic needs.

The ncIMPACT and NCGrowth report found that there is more variation in economic conditions within each tier than between them, and stakeholder insights indicated that the current system does not accurately reflect economic distress at the county level. These insights, coupled with additional research, revealed a need for rethinking the current approach.

The project has strengthened policymakers’ understanding of the Tier System’s current operation and impact, while surfacing important questions for future research and potential refinement. By continuing to evaluate how economic distress is measured, ncIMPACT and its partners aim to support more targeted, effective strategies for communities across North Carolina.

Learn more about North Carolina’s Economic Tiers by reading ncIMPACT’s 2025 Annual Report.

Published March 27, 2026