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

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.