BTC REPORT: Tough Times in Small Places - North Carolina's rural communities are more susceptible to the impact of state and federal budget decisions than their urban counterparts

By Brenna Burch, Policy Analyst, with Tazra Mitchell, Policy Fellow
Budget & Tax Center
February 2012

EXECUTIVE SUMMARY

  • North Carolina’s rural counties are significantly less well-positioned than urban counties to sustainably fund their core governmental operations at current service levels in a time of austerity budgeting at the state and federal
    levels.
  • North Carolina’s rural counties exhibit troubling signs of more widespread economic hardship than do urban counties, in the form of high shares of residents living in poverty, a higher share of residents who have no form of either public or private health insurance, and lower overall wealth as indicated both by county median income and assessed property values.
  • Due to widespread economic hardship, low or negative average population growth, and a significantly higher reliance on intergovernmental revenues, North Carolina’s rural counties are more sensitive to changes in state and federal revenue and expenditure decisions than higher-wealth, faster-growing urban counties
  • Any decline in external funding support to county government in this slow and uneven economic recovery – whether on the revenue or expenditure side of the budget equation – will create a budget gap that lower-wealth counties highly dependent on intergovernmental revenues will be hard-pressed to fill without cutting or eliminating local jobs and core services that support the county’s most vulnerable residents.
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