NHC officials emphasize perspective after downgraded economic rating
On Monday, November 30th, the North Carolina Department of Commerce downgraded the health of New Hanover County’s economy. The main reason for the change: the higher than the average unemployment rate.
It’s the leisure and hospitality industry that’s been hurt most by the economic fallout of the pandemic. And the job loss in that industry is the leading culprit for the county moving from the Department of Commerce’s Tier III economy, the highest-ranking, to a Tier II.
Jennifer Rigby is the Chief Strategy Officer for New Hanover County.
“And they really just look at four data points to determine economic distress.”
Those points being the unemployment rate, median household income, growth in population, and the property tax base. The state ranks counties from 1 to 100, with 100 being the strongest economically.
“And so New Hanover County will be ranked 79 out of 100. And this ranking by the state is done to help provide for different funding opportunities to assist with economic development. And I do want to say, it has no impact on the financial health of the county or the county’s AAA bond rating.”
With this new Tier II designation, Rigby says the county will apply for these state funds in the hopes of supporting initiatives, including but not limited to downtown revitalization programs and water and sewer infrastructure projects.
Editor's Note: The original story had the county interested in applying for funds for two main programs, but a county spokesperson says they will possibly be applying for other initiatives other than revitalization programs and infrastructure projects.
Below is the County's official statement on the Tier II designation:
Each year the NC Department of Commerce ranks all 100 counties according to their overall economic health. This is known as the economic distress ranking, and is based on four factors: average unemployment rate, median household income, percentage growth in population, and adjusted property tax base per capita.
Today, the NC Department of Commerce announced that New Hanover County has moved from a Tier 3 (the highest tier) to a Tier 2 (the middle tier) in their ranking system (view their press release here).
The primary driver impacting this change was an increase in the county’s average unemployment rate, from October 2019 through September 2020. According to Local Area Unemployment Statistics (LAUS), New Hanover County’s unemployment rate was 3.1% in October of 2019 and remained in the 3%-range through April 2020, when it rose to 15.1% due to the impacts of COVID-19. In May, unemployment in New Hanover County was 13.8% and in September, it decreased to 6.5%.
The county’s unemployment rate specifically within the leisure and hospitality industry, which has been among the hardest hit from COVID-19, was cited by NC Department of Commerce staff as the primary driver for the county’s change in ranking.
New Hanover County will now be ranked 79 out of 100 counties, which puts the county near the top of Tier 2. This ranking can provide additional funding opportunities to assist in economic development for New Hanover County, and has no impact on the financial health of the county or the county’s Triple-A bond rating.
This year’s NC Department of Commerce rankings are reflective of four data points, and do not take into account the impacts from COVID-19. New Hanover County has been actively working with local businesses, the City of Wilmington, Wilmington Business Development, and the Wilmington Chamber of Commerce to help businesses reopen safely and provide financial relief through CARES funding to help sustain employment opportunities, and this work will continue in the coming year.
And, despite COVID-19, the local economy has performed better than anticipated this year. New Hanover County anticipated a shortfall of $9 million in sales tax revenue this year because of COVID, but was only short $300,000 - reflective of a .6% decrease from the fiscal year prior. And property tax revenue this year increased 1.2% from the prior year. The county has also been able to increase its fund balance in the General Fund through strategic cost savings, bringing it back in line with the county’s policy, to ensure the county is able and ready to respond to any emergency funding needs.
New Hanover County remains economically sound, is poised to support more workforce development, and is committed to help our residents access jobs and sustain employment in the coming year.