Legislators are putting the state’s economic development
tier system under a microscope again, having kicked off a series of interim meetings
on Thursday with a discussion of how to measure economic distress. In a series of
presentations to the
Joint Legislative Economic
Development and Global Engagement Oversight Committee (EDGE), non-partisan
legislative staffers offered an analysis of the strengths and weaknesses of the
current tier system. At the conclusion, committee co-chair
Sen. Harry Brown strongly indicated his desire
for the EDGE Committee to propose reforms to the system, stating that a lot had
changed in North Carolina since the system went into place 30 years ago. In
those remarks, Senator Brown acknowledged the difficulties in changing a
long-entrenched formula.
In
their analysis of the
current formula for measuring economic distress, staff members first encouraged
legislators to formulate a clear policy goal for how to use the formula. Then,
the staffers said, legislators could choose the best indicators of economic
distress for use in achieving the policy goals. Currently, more than a dozen state
programs utilize the tier system rankings as a proxy for economic distress,
including grant funding programs designed to alleviate that distress. Of
importance to cities, the staff presentation broke down the current tier system
formula into measures of the economic distress of residents -- such as median
household income and the unemployment rate -- versus measures of a local
government’s capacity to respond to distress by itself, such as its property
valuation and tax capacity. As they examine the issue, legislators will likely
look at changing how much weight the formula gives to a local government’s tax
capacity.
The League's membership
supports
a revision of the tier system to focus the measurements more closely on the
causes of economic distress. View and listen to the staff presentation on this
topic on
the EDGE Committee’s website. The
site also contains other materials and information received by the EDGE
Committee on Thursday, including a staff analysis of all the state-level economic
incentive awards made since 2013. The EDGE Committee will continue to meet
monthly leading up to the General Assembly's short-session in May, and the committee
may recommend legislation for the chambers to consider during that session.
Contact:
Erin Wynia