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Wednesday, 19 December 2012 14:33

College kids gum up Jackson County’s economic stats

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The economic situation seemed to be looking up in Jackson County: unemployment was on a steady decline; the real estate market was rebounding; and tourists were finding more expendable income to travel.

That is why local leaders were left scratching their heads when Jackson County was labeled among the most economically distressed counties in the state in the recent rankings by the N.C. Department of Commerce.

The reason: the countywide poverty rate, which had long teetered on the brink of 19 percent, had finally jumped above the 20 percent mark. For counties with a population of less then 50,000 residents, a poverty rate of that magnitude is an automatic qualifier for the bottom of the economic barrel in the state’s rankings.

The state ranks counties into three tiers: the top 20, middle 40 and bottom 40 economically. Jackson recently moved from the middle ranking to the lowest tier.

Despite scoring well in most of the other economic factors that determine the rankings, for Jackson County, the poverty rate meant it joined the likes of Swain, Graham and Cherokee counties, whose unemployment rates are stuck squarely in the double digits. Jackson has had its share of economic woes, however, though its not as bad off as its smaller, more rural neighbors to the west.

Layoffs in the public sector — which has typically been a strong workforce in Jackson — have taken their toll, especially at Western Carolina University, which cut nearly 100 jobs during a two-year period, as well as at the N.C. Center for the Advancement of Teaching, which lost another 60 in recession-induced state budget cuts.

However, the county’s unemployment rate was below 8 percent in October this year, down nearly a whole percentage point from the same month last year.

October, a strong tourism month in the mountains, typically sees some of the lowest unemployment rates out of the year. By contrast, Jackson started off 2012 with more than 11 percent unemployment.

Ryan Sherby, interim director of the Southwestern Planning and Economic Development Commission, works with the seven westernmost counties in the state to coordinate regional initiatives, many of them economically driven. He was taken aback when the rankings were first released.

“Jackson County has had a very positive growth rate in the state,” said Sherby. “We have some factors in our favor that shows we were doing well so this poverty rate comes as kind of a surprise.”

He said poverty needs to be taken seriously, but the rankings may be misleading and form a false impression about the county.

“Perception is reality,” Sherby said. “We don’t want people to think we are bunch of poor people living in the country when it seems people are doing well.”

Last year, Jackson County ranked in the middle tier, alongside Macon and Haywood counties. This year, Macon County held its place in the middle, and Haywood County was promoted to the best tier.

In spite of having a lower unemployment rate and higher median household income than Macon County, Jackson County now ranks lower.

And even anecdotal economic indicators were bucking the trend of Jackson County’s de-classification. Merrily Teasley, owner of Balsam Mountain Inn and a member of the county tourism authority board, said she watches the economy choo-choo past her business everyday.

“Everyday, I count the train cars,” Teasley said of the Norfolk Southern freight rail line that goes in front of the Inn. “And there’s definitely more than last year. It’s a crazy way to count the economy, but hey.”

She added her own business is up compared to last fall as well.

 

The college student factor

The recent round of tier classifications has county leaders questioning the methodology, and more importantly, how the poverty rate is calculated.

Many are pointing the finger at college students who could be artificially inflating the number of county residents living in poverty. Students working a part-time job, or no job at all, seem to be living below the poverty rate, when in fact they are supporting themselves on student loans or their parents’ goodwill while focusing on their studies.

When asked about the poverty rates, Jackson County leaders — from the county’s Chamber of Commerce director to local business owners to government officials — surmised that students might be to blame.

It turns out their musings are on target.

Of the 7,000 Jackson County residents living below the poverty level, 1,500 are enrolled in graduate or undergraduate degree programs, according to U.S. Census data used by the Department of Commerce to determine the rankings.

With those college students included, the Jackson’s poverty rate appears to be almost 20 percent. Subtract them from the equation, however, and its poverty rate is only 15.7 percent — and Jackson would have its old tier II ranking back.

Case in point, WCU senior Lindsay Chewning lives off campus and makes less than $10,000 per year working part-time at Black Rock outfitters in Sylva, which for her is “enough to get by” on along with student loans. But after she graduates with a degree in recreational therapy, she expects make about $40,000 per year — well above the poverty threshold.

Across Sylva’s Main Street at In Your Ear Music Emporium, WCU senior Katie Knoop expects an even bigger paycheck when she graduates with her major in computer science and minors in mathematics and physics. But, making $8 per hour working the cash register, along with help on the side from her parents, is getting her through college.

Trudy Renwick, chief of the poverty statistics branch of the U.S. Census Bureau, said the college-student phenomenon is common. She cited an example from her neck of the woods in Tompkins County, New York, which is dominated by Ivy League Cornell University.

After being dinged for high but disingenuous poverty levels due to its large college population, she said the county’s planning department there requests a special tabulation for university and non-university demographics from the Census Bureau.

“Lots of students do end up being classified in poverty,” Renwick said.

But, Renwick also pointed out that there are students who do live in poverty; so excluding them entirely may not be perfectly accurate either.

The recent boom in off-campus housing construction is partly to blame for pushing the county down to the bottom tier. While students living on campus aren’t counted in the stats, those off campus are — and growth in off-campus housing to accommodate the burgeoning student population at WCU means more of them are now being factored into the county’s poverty rate than ever before.

Students aside, Jackson should still be concerned about poverty levels of its general population, Jackson County Manager Chuck Wooten said. One northern region of the county, near Cherokee and far from WCU, has a poverty rate of about 25 percent — a rate that may not be inflated by students.

“Those are our people living in poverty,” Wooten said. “It’s distressing really.”

There could be an upside to Jackson’s new “economically-distressed” ranking. Jackson County will now be eligible for more public assistance and grants reserved for the bottom 40 counties. But, lifting residents out of poverty is no simple feat.

“I’m trying to figure out how to attack that,” Wooten said. “I think it’s a bigger issue than commissioners will be able to confront with ‘Let’s adopt a resolution to eliminate poverty.’”

 

Taking action, setting the stage

Poverty rates aside, the county’s other four economic factors — property values, population growth, median household income and unemployment rate — were good enough to keep it in the middle tier and make it look competitive next to its neighbors.

“Jackson would probably have stayed similar to where it was last year if it hadn’t had the automatic qualifier,” said Tim Crowley, a spokesman with the N.C. Department of Commerce. “They’re enough in the middle they would not have moved a tier.”

Jackson County actually ranked in the top 20 among counties for population growth and in the top five for assessed property value per capita — possible indicators that the real estate market in Jackson County is fairing better than other places.

Of course, measuring property values on a per capita basis is also rife with pitfalls as an economic indicator. In a resort haven like Jackson County, expensive second homes bolster average property values, but the out-of-state homeowners aren’t part of the “per capita” denominator in the equation. It appears average residents own far more expensive homes than they actually do, simply because second-home owners don’t get factored into the formula.

Still, Robin Nations, a real estate broker with Jackson County Real Estate, was cautiously optimistic about the property market outlook. She said she has noticed that real estate seems to be selling higher in Jackson County than neighboring counties, including Haywood. But, the market was still far from booming.

“We’re not out of the woods yet,” Nations said.

She speculated that because Jackson County has traditionally been a secondary vacation home market, a stronger real estate market would have to come on the tails of economic improvements in places like Atlanta and Florida first.

Yet, Nations wasn’t looking to change careers anytime soon and believes Jackson Counties has intrinsic value that will keep property values high.

“A lot of Realtors are getting out of it, but I’m going to be staying in real estate,” Nations said. “We have several good anchors to bring people here — it’s a beautiful place to live, and that’s never going to change.”

But Jackson County Commissioner Doug Cody said local government could be doing more to facilitate a faster recovery, especially in the area of real estate and job growth.

Regardless of the skewed poverty rate, Cody said Jackson County has not done enough to stay competitive attracting businesses. The county’s economic development commission has been defunct for several years. It is one of the few counties in the region with no economic development authority and no economic development director — something the current board of commissioners hope to change.

“You’ve got to be a player before you can compete,” Cody said. “We’ve had some decisions made in the past that kept us from growing when we should have been growing.”

Cody pointed to stringent mountainside building regulations put in place five years ago as hurting construction, although supporters of the regulations say the recession, not the regulations, are what hurt construction. Nonetheless, newly elected commissioners have instructed the planning board to rework those regulations. Cody said he would like to see them a little less stringent.

Commercial development in the county has also been choked by lack of water and sewer services from the Tuckasegee Water and Sewer Authority, which had maxed out the capacity of its system, Cody said.

“It was kind of the perfect storm,” he said.

Yet, he saw promise.

The county has assembled a new, countywide Tourism Development Authority and is looking to reform its economic development committee. New construction permits have been up in Jackson County, higher than its neighbors, during the past years and the legalization of alcohol sales countywide has given some business owners another product to push.

“All of those things will bear fruit down the road a ways,” he said. “If economy keeps turning around, you’ll see some positive results.”

For the time being, Jackson County can look for some immediate boosts as a result of its new distressed tier classification. Larger tax incentives are available for companies and job makers who move to tier one counties. On the grant side, Jackson is now eligible for social welfare and health grants it either couldn’t get, or got less of, before.

Jackson County’s Department Social Services has already been contacted about the new grant opportunities. And Paula Carden, the county’s Health Department director has looked into the new funding streams available from the Kate B. Reynolds Charitable Trust Fund, one of the largest in North Carolina that targets poorer populations found in tier one counties.

But even Carden, whose department may benefit, was surprised at the new classification.

“I was not expecting it,” she said. “We seem to be doing pretty well — the community as a whole.”

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