DOBSON — Call it a mixed blessing or a back-handed compliment.
The North Carolina Department of Commerce announced last week that Surry County has changed levels in the program that dictates how much state money is available to lure prospective businesses to the county.
According to a letter sent to County Manager Chris Knopf from Deputy Commerce Secretary Dale B. Carroll, the county will move from its present status of a Tier I county to Tier II, effective on Jan. 1.
Knopf said each year, the Commerce Department ranks the economic health of the counties, with 40 counties ranked Tier I, 40 counties ranked Tier II and the top 20 counties receiving a Tier III ranking.
“It’s based on economic status, and they re-evaluate it every year about this time,” the county manager said. “It’s directly tied to tax credits available that growing businesses can qualify for, and how much those credits are valued. If you’re Tier I, which we’ve been for the past several years, the amounts you’d qualify for in those tax credits are higher. As a Tier II county, it’ll be lower.”
Carroll said the county has improved enough that it is now ranked 41st, resulting in the county edging into the Tier II category.
His letter to Knopf gave the reasoning for the move.
“Surry County improved in all four tier development factors related to overall tier designation,” he wrote. “The county’s adjusted property tax base per capita ranking raised three places, from 72nd to 69th. The county continued to experience an increase in population growth, moving it from 71st to 68th in statewide ranking.
“Likewise, its increase in median household income from $34,397 to $36,622 improved its rank from 71st to 66th in the state.
“Additionally, Surry County’s twelve-month average unemployment rate dropped, moving its state rank from 54th to 50.
“While none of these improvements were extremely large, their combined impact moves Surry County from a final rank of 35 last year to 41 in 2013, which changes its designation to Tier II,” Carroll concluded.
Knopf said the county’s slight improvement is a positive, but speculated that other counties experienced a substantial enough decline that it could result in Surry County’s move to Tier II.
“My personal opinion is that if you’re on the street here, you’re not seeing much of a difference in the shape we’re in, but the other counties in the state could have become so much worse that they’ve fallen below us and pushed us up,” he said.
He added that the move is an overall positive, but it can be bad for businesses seeking tax credits.
“Supposedly it means our economic situation is improving, but if you’re trying to market the county, Tier I offers more incentives for companies to locate here, so we’ll lose a little bit of that, but it puts us on a level playing field with the county’s around us. We’ve had a little bit of an advantage as a Tier I county, but we’re not going to have that advantage now.”
Like Knopf, Todd Tucker, president of the Surry County Economic Development Partnership, said it’s something of a double-edged sword.
“It depends on how you look at it,” he said. “It’s a good thing that we’re now a Tier II county because that means we’ve improved economically, but from a recruitment standpoint, it does change what the state will offer us as far as tax credits.”
Tucker said that as a Tier I county, Surry County qualified for incentives of as much as $12,500 per job created. As a Tier II count, that number will drop to $5,000 per job.
“I’m not saying it’s going to change the way we recruit new industries, but it’s going to change the things we can offer companies from the state,” he said.
Tucker said it isn’t a huge negative, “but it could be a little bit more challenging.”
“We’re supposed to be doing things to make the county’s economic situation improve, and that’s what we want to do,” he said. “You have to be in a category, and we’re number 41.”
The economic development official said it is simply a matter of reality.
“It’s not something we’re jumping up and down about, but that’s what it is and we’ll work with it,” he said.
Reach Keith Strange at firstname.lastname@example.org or 719-1929.