LUMBERTON — Robeson County’s economic designation will remain Tier 1 in 2013, according to the state’s Commerce secretary, indicating the highlest level of economic distress, but also positioning it for help.
The annual designations, which are mandated by state law, are used to determine a variety of state funding opportunities that are available to assist in economic development. Based on a three-tier ranking, Tier 1 counties — like Robeson — are considered the most economically distressed, and Tier 3 counties are considered the least distressed.
“Our mission is to improve the economic well-being and quality of life for all North Carolinians. We want all of our residents to have good jobs regardless of where they live in the state,” Commerce Secretary Keith Crisco said. “These tier rankings provide important tools that help attract and retain businesses in all parts of North Carolina.”
Tier designations are based on a formula outlined in the 2006 Tax Credits for Growing Businesses, more commonly referred to as Article 3J tax credits, according to the Department of Commerce. The department puts together required statistics for each of the state’s 100 counties, and using the formula determines the tier rankings.Businesses that locate in lower-tiered counties can become eligible for some grant programs and larger tax credits than those that locate in higher-ranked areas.
Rankings are based on each county’s unemployment rate, median household income, population growth, and assessed property value per capita. Counties with a population of less than 12,000, or counties 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 being among the state’s most economically distressed.
Robeson and 39 other counties are included in Tier 1. State law requires that the 40 most distressed counties be designated Tier 1, the next 40 most distressed counties be designated Tier 2, and the 20 most prosperous counties be designated as Tier 3. In addition to Robeson, counties in the surrounding area designated as Tier 1 include Bladen, Columbus, Hoke, Scotland, and Richmond. Hoke County last year was designated as a Tier 2 county.
Cumberland County, which includes Fayetteville, is designated as Tier 2.
Tier designations determine how much tax credits are available for job creation and business property investment in a number of industries, according to the Department of Commerce. These industries include manufacturing, motor sports, aircraft maintenance and repair, air courier services, warehousing, customer service call centers, research and development, electronic shopping and mail order houses, and wholesale trade and information technology.
Greg Cummings, industrial developer for Robeson County, said Thursday that he likes the state’s tier system because it “shows the state is trying to work with the counties that have experienced loss of jobs.”
“Being designated Tier 1 helps recruit businesses to the area,” he said. “Every company likes to go into a Tier 1 county if they need corporate tax breaks.”
Cummings said that larger companies not as dependent on tax credits will move toward the Tier 3 areas, such as those that include Charlotte and Raleigh.
“The bigger companies like the metropolitan areas,” he said.
Bo Biggs, a Lumberton businessman, agrees with Cummings.
“Although it’s not like wearing a badge of honor to be designated as Tier 1, it does make the county eligible for more benefits from the Department of Commerce,” he said.
All companies eligible for economic incentives 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, according to the state.
According to the Department of Commerce, potential benefits to companies locating in each tier designation include:
— Tier 1: $12,500 tax credit per new job with a requirement to create at least five jobs. Also 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. Also 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. Also a 3.5 percent tax credit for eligible business property expenditures of more than $2 million.