Rural North Carolina faces political, economic struggle

Rural North Carolina faces political, economic struggle

The former Drexel Heritage Furniture factory site has been empty for more than a decade. Its namesake town of Drexel, in eastern Burke County, has less than 2,000 residents. Michael Gebelein / Carolina Public Press

The state cannot simply leave rural areas behind, Sen. Harry Brown, R-Onslow, has warned.

But despite being majority leader of the North Carolina Senate, Brown and others who want to rebuild the state’s rural economy face the dual challenge of dealing with traditional regional rivalries as well as a business climate far more favorable to major cities.

As political battles go, rural versus urban is one of this state’s oldest, owing at least in part to North Carolina’s 600-mile sprawl from mountains to coast.

Thanks to accelerating demographic trends that have seen urban areas eclipse rural ones in population, economic growth and political clout, the old “rural versus urban” problem has new urgency.

How we got here

“There are at least three regions of North Carolina,” Jonathan Daniels explained in his introduction to the 1939 Works Progress Administration’s Guide to North Carolina, “different not only in the geography of Coastal Plain, Piedmont and Mountain Regions, but different in the men and their preoccupations within them. Over roads and taxes, representation and offices they have fought and quarreled and still fight and quarrel.”

In his time, Daniels witnessed North Carolina’s economic transition from its agricultural roots. Tobacco became an industry as well as a crop, and rapidly growing mill towns sprang up in an arc that roughly traces the I-85 corridor from Gastonia to the Triangle.

Although population and wealth grew in the state’s urban regions, the political clout of rural North Carolina remained powerful and deep into the 20th Century.

Now, driven by demographic changes and both in-state and out-of-state migration, that clout is waning, raising concerns that already troubled rural communities are being left behind just when help from the state is needed most.

With rural population numbers drifting lower, rural political clout is now dependent on a Republican coalition of rural and suburban legislators, according to Catawba College political scientist Michael Bitzer.

Both rural and suburban areas have become increasingly GOP-leaning, while Democrats have seen a higher and higher percentage of urban votes.

“That’s not going to change anytime soon,” Bitzer said. “The question becomes how that is dealt with when rural counties constitute less than a quarter of those registered in the state.”

In transportation, infrastructure and economic development funding choices, rural leaders are going to have to rely more and more on their suburban partners.

“When you take into account that, nationally, 80 percent is in urban or suburban areas and 20 percent in rural areas, I’m not real convinced that there is a reversal to be had at this point,” Bitzer said. “It’s the nature of the dynamics nationally that’s happening in the state.

“The state is going to have to continue struggle with (these questions). For such a diverse state, when all the attention and focus gets put on 20 counties at the most, what happens to other half of the state?”

By the numbers

In terms of where people live, the 1990 Census confirmed North Carolina’s shift from a mostly rural state toward an increasingly urban state, showing an almost even split in where people lived.

Ten years later, the Census found most of the state’s residents, 50.3 percent, resided within municipal boundaries. Sixty percent were classified as living in an urban area.

In the 2010 Census, the trend accelerated, raising the share of the state’s population living in urban areas to two-thirds. It also detailed a shift among those living in urban areas from smaller cities to larger ones, confirming that not only is the state becoming more urban, its largest cities are powerful magnets for younger workers in a changing economy.

Census estimates show that Mecklenburg and Wake counties — the state’s most-populous counties and home to Charlotte and Raleigh — continue to account for one-quarter of the state’s population growth.

At the same time, North Carolina still has one of the nation’s largest rural populations.

Its 3.2 million rural residents ranks second behind Texas. Population density, even in municipalities, is below other large states. Fourteen counties located in either the western mountains or the low-lying northeast coastal areas have no urbanized areas at all.

Economic woes, political challenge

Brown, since assuming the role of Senate Majority Leader, has made the urban-rural divide a front-burner issue in the legislature.

Although his district includes a population center in Jacksonville, the rest is a broad area of highly rural coast and coastal plains, without direct access to the state’s major transportation arteries.

Brown has tried to increase road and infrastructure spending to help rural areas.

In 2017, he filed legislation to rewrite the state’s sales tax distribution formula to send more tax receipts to counties without big retail centers by weighting the distribution more toward the home address of the customers than the retailer.

Cities and counties with major shopping malls furiously opposed the move and eventually beat it back.

But Brown succeeded in making his point that too often the way the state splits revenue doesn’t treat its rural areas fairly.

“I think it is a concern, and I’m going to continue to push this agenda,” Brown said in a recent interview.

“I think we’ve got to continue to look at ways to help these rural parts of the state with economic issues to put them into a position where they can help themselves and not depend on the state.”

Brown, who is the Senate’s chief budget writer, said that despite the intention of economic-incentive programs and the state’s tier ranking system, which lawmakers designed to help smaller, less wealthy counties, rural areas still lag far behind in dollars received.

A recent study by the Joint Legislative Economic Development and Global Engagement Oversight Committee, known as the EDGE Committee, showed that just two counties have been gathering the lion’s share of the funds – fast-growing Wake and Mecklenburg.

Brown, who chairs the EDGE Committee, is pushing with others for legislation to revise the tier system to move more money to the poorer counties it was designed to help.

“If we’re going to have a state incentive package, it needs to be a state incentive package and not a few-county package,” he said.

For now, that may be a difficult task, according to N.C. State University economist Michael Walden. Incentives to recruit businesses are mostly market-driven, and companies are moving to larger markets because that is where the college-educated talent they seek wants to be.

Walden sees some hope for smaller metro areas eventually.

“I am optimistic that as the labor market tightens in the big metros, we will see some increase in announcements in some of the smaller metros,” he told Carolina Public Press in an interview last month.

“But all the big forces in the economy are favoring big metros now.”

To succeed, he said, smaller cities will have to market their strengths, particularly the lower costs of living and housing.

Smaller communities and rural areas will have to look at a mix of options, Walden said, from manufacturing that requires large sites to tourism, retirement development and agribusiness.

“Accessing foreign tourists could give our state a big lift,” he said, as could attracting more baby-boomer retirees to small towns and rural areas.

The executive branch is also rebooting economic development programs for rural areas. On Feb. 1, Governor Roy Cooper announced an initiative dubbed “Hometown Strong,” which the governor said will focus on local partnerships in infrastructure improvements, workforce training and broadband access in rural areas.

The first project announced as part of the initiative is a $12 million fund for infrastructure improvements to industrial sites in economically distressed counties.

In-migration setting records in North Carolina

The biggest force driving demographic shifts is the number of people arriving to North Carolina every day from somewhere else — called in-migration. Mostly, they are not landing in rural communities.

In her blog for Carolina Demography, a part of UNC’s Carolina Population Center, director Rebecca Tippett pointed to recent data that shows almost two-thirds of the state’s population growth is from in-migration. Rates appear to be accelerating.

“Since 2010, North Carolina’s population has grown by more than 737,000 residents, an increase of 7.7 percent,” Tippett wrote in a post late last year.

“Sixty-four percent of this growth was due to net in-migration. In the most recent year (2016), North Carolina received an estimated 86,200 net in-migrants (74 percent of total population growth).

“This was the largest year of in-migration for the state since the 2010 Census and was more in-migrants than received by any other state except for Florida, Texas, or Washington.”

While communities along the I-85/I-40 corridor draw most of that growth, the opposite is happening just one or two counties away from those major highways as young people move only to where the jobs are. Combined with aging populations, this is leading to a steady decline in some rural northeastern and mountain counties.

The consequences of these trends are devastating for local governments, which are seeing an increase in needs for an aging population while facing a reduction in tax dollars.

“You look at some counties in the mountains and you wonder how they put together an efficient offering of education services for their residents when the school age population continues to dwindle,” Bitzer said. “At some point you’re probably going to see a county school system have to merge with another county’s school system just for efficiency sake.

“What you may start to see is a regionalism approach to governance that breaks across county lines just simply to create some kind of tax base and population base that can support fundamental government services.”

In counties where the largest employer is the public schools, the loss of school-age children means fewer jobs in the schools. It also makes it much harder for a county to recruit new employers.

“What an employer is going to look for is a capable workforce,” he continued. “And if you don’t have that base there, why would anybody come there?”

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