12/02/08 — Wayne development rating improves

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Wayne development rating improves

By Matthew Whittle
Published in News on December 2, 2008 1:46 PM

Despite several recent announcements of job loss and the fact that its actual economic situation is largely unchanged from last year, the state Department of Commerce moved Wayne County up in its 2009 economic development tier rankings.

A Tier 1 county for the last two years, Wayne was reclassified for 2009 as a Tier 2 -- one of four counties to move to a higher designation.

The tier rankings are based on an assessment of each county's unemployment rate, median household income, population growth and assessed property value per capita.

Then, using those statistics, the state's 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 most prosperous counties as Tier 3.

Additionally, any county with a population of less than 12,000 or with a population of less than 50,000 residents and a 19 percent or more poverty rate, are automatically classified as Tier 1, regardless of their performance in the other categories.

Once classified, the tier designations then help determine part of the potential incentives companies moving to those counties can receive, provided they offer health insurance and pay 50 percent of the premiums, don't owe back taxes, have not received a significant economic violation notice from the state, and in Tier 1 and 2 counties, meet a wage test.

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

* Tier 2 -- $5,000 tax credit per new job with a requirement of 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 of at least 15 jobs, and a 3.5-percent tax credit for eligible business property expenditures of more than $2 million.

Additional state incentives may also be based partly on these rankings, said commerce department spokeswoman Deborah Barnes.

However, explained Wayne County Economic Development Alliance President Joanna Helms, Wayne County's movement from Tier 1 to Tier 2 was not the product of any great improvement, but largely of the requirement that all counties under 12,000 in population be classified Tier 1.

"Our overall economic situation didn't really change," she said.

From the 2008 to 2009 rankings, Wayne County remained at No. 35 based on the statistical formulas, with 1 being the most distressed and 100 being the least.

But, she continued, she does not expect the change to hurt the county's economic development efforts.

"I think it will have some effect, but I do not think it will have a great effect," Mrs. Helms said. "We do have some companies that look at those tax credits, but it's usually not a deal-breaker."

She explained there are other incentive packages that companies also take into account, as well as, added County Manager Lee Smith, the quality of the county's workforce.

"It's kind of a mixed blessing. It's a blessing because we haven't been as hard hit, but at the same time, we lose that tool to use," he said. "But I don't think it's going to be that big of a difference. We've done a lot of workforce development and I think we get our edge there."

And really, Mrs. Helms added, Wayne County belongs in that mid-range tier -- where it had been for years until the 2007 rankings.

"It puts us back where we've always been, and that makes sense because, to me, Wayne County is not one of the most distressed counties, but we're not one of the highest level ones either," she said.

Also moving from Tier 1 to Tier 2 was Duplin County -- a change that County Manager Mike Aldridge called "surprising."

Based on the county's improvement in its average unemployment rate, relative to the state's other 99 counties, Duplin's ranking improved from 37th to 40th -- five spots ahead of Wayne.

"On the surface it's a good thing," he said. "But I don't think anything has really changed significantly here locally for that to be the case, and it could be a detriment to individual projects."