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Features Economic distress encroaches upon much of WNC

Macon County among exceptions

According to a yearly ranking report released by the North Carolina Department of Commerce at the end of 2010, the economy of Macon County is not as distressed as other Western North Carolina counties which have been adversely impacted by the recession in recent years.

The annual NCDC report ranks all 100 counties in the state for economic well-being and assigns each county a tier designation. The most economically distressed counties are designated as Tier 1, followed by Tier 2 and then the least distressed as Tier 3. Factors taken into account per county are average unemployment rates, statutes, percentage growth in populations, median household incomes and adjusted assessed property values per capita.

The state mandated designations determine a number of government funding opportunities to assist in economic development, specifically to counties burdened by the most by recession.

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. A part of the burden is unemployment, say officials.

“Our goal is to encourage economic development statewide so all of our residents can find sustainable, well-paying jobs regardless of their location,” said NCDC Secretary Keith Crisco. “The tier designations provide strong tools to help make our less prosperous counties more attractive to businesses looking to relocate or expand.”

“The unemployment rate is still too high, and the Department of Commerce will continue to be aggressive in creating jobs,” said NCDC Assistant Secretary of Communications Tim Crowley. “USA Today says that North Carolina is one of a handful of states that’s leading the nation in this recovery, even while NC’s unemployment rate is lower than the nation’s.”

Crowley’s statement coincides with a report released at about the same time by the North Carolina Employment Security Commission, which indicated an overall increase in unemployment throughout the state. According to the report, 196 people in Macon County filed for unemployment from October to November last year – a 1.4 percent increase.

The national unemployment rate has decreased by .4 percent, according to a recent report released by the U.S. Bureau of Labor Statistics, and as of December, the national rate is 9.4 percent.

Tier drops for WNC

There are currently 40 Tier 1 counties and the same number of Tier 2 counties, while the remaining 20 counties in the state fall under Tier 3. The Tier system is incorporated into various state programs, including the Article 3J Tax Credits, to encourage economic activity in the less prosperous areas of the state.

Cherokee, Clay, Graham and Swain counties all fall under the first Tier designation.

Since last year, Cherokee and Swain counties have dropped to that designation from a Tier 2 ranking, as their economies grew more constrained amid a challenging recession. Only three other counties outside of Western North Carolina have dropped in rank.

According to Crowley, idle population growth and unemployment have both contributed to the economic situations of Cherokee and Swain counties. Cherokee County, which encompasses the towns of Andrews and Murphy, suffered a 1.8 percent unemployment rate increase. While Swain County, with the county seat of Bryson City endured a 2.5 percent increase.

“Cherokee’s unemployment rate remained largely unchanged, while Swain’s went up about a point,” said Crowley in a statement. “The Department of Commerce has pledged to aggressively pursue job creation in all portions of North Carolina.”

Macon County has maintained its Tier 2 ranking since 2007, and Haywood County has fallen from a Tier 3 designation in 2009 to a Tier 2 designation in 2010.

Potential benefits to companies

Tier 1 - $12,500 tax credit per new job with a requirement to create at least five jobs, and a 7 percent tax credit for eligible business property expenditures.

Tier 2 - $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.

Tier 3 - $750 tax credit per new job with a requirement to create at least 15 jobs, and a 3.5 percent tax credit for eligible business property expenditures of more than $2 million.

All eligible companies are required to offer employees health insurance and pay at least 50 percent of the premiums, cannot owe back taxes and cannot have received a significant environmental violation notice from the state Department of Environment and Natural Resources. In Tier 2 and Tier 3 counties, companies also must meet a wage test. To view the unemployment report by the North Carolina Employment Security Commission, visit www.ncesc.com/default.aspx.

To view the tier designation report by the NCDC, visit www.nccommerce.com/en/BusinessServices/SupportYourBusiness/Incentives/CountyTierDesignations2011.htm.


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