On Wednesday, the North Carolina Department of Commerce released its 2026 county economic development tier rankings, the annual assessment that categorizes all 100 counties into three levels of economic distress. The tier system determines eligibility and match requirements for some of the state’s largest taxpayer-paid incentive programs, including the One North Carolina Fund and Job Development Investment Grants (JDIG).
Under the 2026 designations, 18 counties will shift tiers. Counties moving toward improved economic status include Beaufort, Camden, Davie, Graham, Macon, Montgomery, Randolph, Stanly, and Surry. Counties showing reduced economic performance include Buncombe, Burke, Granville, Haywood, Henderson, Jones, Madison, Pasquotank, and Yancey.
State officials emphasized that the rankings are determined using four standardized metrics: unemployment rate, median household income, population growth over the previous 36 months, and the county’s per-capita property tax base. Counties are then ranked and grouped into fixed allocations: 40 counties designated as Tier 1 (most distressed), 40 as Tier 2, and 20 as Tier 3 (least distressed).
Long-Standing Criticism Resurfaces
While the release is a routine annual update required under state law, it arrives as lawmakers and economic analysts continue to question whether the tier structure still reflects economic reality on the ground.
In 2023, state Rep. Ben Moss, R-Richmond, was among those who called the system outdated and in need of restructuring, arguing that the fixed 40-40-20 distribution creates distorted outcomes. In an earlier interview with Carolina Journal, Moss pointed out that counties may appear more economically stable on paper even while specific communities within them remain deeply distressed. The system, he says, could leave struggling areas without equal access to state development dollars.
“Too many organizations and agencies use it as a convenient crutch rather than actually analyzing rural poverty and recognizing that it’s possible for a portion of a high-growth county to have deep pockets of rural poverty that desperately need government services.,” he said at the time.
Policy discussions in recent years have included proposals to eliminate the fixed tier counts altogether, or to replace the county-level framework with metrics targeting smaller regions, towns, or census-based economic zones.
“One primary use of the tier system is in conjunction with the state’s economic incentive programs, such as JDIG. Programs such as that should not exist,” said Brian Balfour, senior vice president of research for the John Locke Foundation. “Instead of taxpayer handouts to targeted and often politically-connected corporations, North Carolina should treat all businesses equally and establish a policy environment broadly conducive to investment and job creation. The tier system enables these targeted programs that resemble central planning, in which a small group of government officials determine which businesses receive advantages.”