County Economic Status Designations in the Appalachian Region, Fiscal Year 2004

Introduction

In accordance with the Appalachian Regional Commission's policy for determining the economic status of the 410 Appalachian counties, ARC has analyzed the distribution of distressed, transitional, competitive, and attainment counties for fiscal year 2004. The data used by ARC to determine the Region's economic status were updated and released by source agencies over the past few months. These updates include the annual release of income and unemployment data, as well as the decennial release of poverty data. Therefore, the most current data available for calculating the economic status in fiscal year 2004 include the 1999–2001 three-year average unemployment rate (U.S. Bureau of Labor Statistics), 2000 per capita market income (U.S. Bureau of Economic Analysis), and the 2000 poverty rate (U.S. Census Bureau).

Criteria for County Economic Status

Distressed Counties have poverty and unemployment rates that are at least 150 percent of the national averages and per capita market incomes that are no more than two-thirds of the national average. Counties are also considered distressed if they have poverty rates that are at least twice the national average and they qualify on either the unemployment or income indicator.

Transitional Counties are those counties that are neither distressed, competitive, nor attainment.

Competitive Counties have poverty and unemployment rates that are equal to or less than the national averages and they have per capita market incomes that are equal to or greater than 80 percent, but less than 100 percent, of the national average.

Attainment Counties have poverty rates, unemployment rates, and per capita market incomes that are at least equal to the national rates.

Regional Changes in Economic Status

Using the criteria that are currently in place, the distribution of ARC's county economic levels will change dramatically in fiscal year 2004, due primarily to the reduction of poverty rates between the 1990 and 2000 census. Of the 410 counties in Appalachia, 51 counties will experience a change in economic status. Of these, 40 counties will experience a positive change by moving up in economic status, while only 11 counties will be negatively affected by moving down in economic status. (See Appendix 1 for a list of the 51 counties shifting in economic status. A complete list of the county economic data is provided in Appendix 2.) Although shifts will occur between many of the different categories, the primary change will occur between the distressed and transitional categories, as expressed by the net change of counties in Table 1. Maps 1 and 2 reveal the region-wide changes in economic status between fiscal year 2003 and fiscal year 2004.

**Table 1: Net Change in the Number of Counties per Economic Level, Fiscal Years 2003 and 2004**
Economic Level	Fiscal Year 2003	Fiscal Year 2004	Net Change
Distressed	121	91	-30
Transitional	259	289	+30
Competitive	21	22	+1
Attainment	9	8	-1
Total	410	410	0

Distressed County Analysis

The number of distressed counties in Appalachia will be reduced from 121 counties in fiscal year 2003 to 91 counties in fiscal year 2004—a net reduction of 30 counties. This decline is due primarily to the reduction in poverty rates during the 1990s. Census 2000 data reveal that poverty rates (the percentage of people living below the poverty threshold) were significantly reduced throughout the Appalachian Region. Overall, 350 of the 410 Appalachian counties experienced a reduction in their poverty rate, which led to a region-wide decrease from 15.4 percent in 1990 to 13.6 percent in 2000. More important, the reduction of the Region's poverty rate was much greater than that experienced by the nation as a whole; the national rate fell from 13.1 percent in 1990 to 12.4 percent in 2000. Improving faster than the nation, the poverty rates in many Appalachian counties were significantly reduced when compared to the U.S. average, thereby reducing the total number of distressed counties.

Near-Miss County Analysis

Several counties have been identified as having economic characteristics that border on the distressed threshold but remain in the transitional category. Examining these counties helps to predict potential shifts to the distressed category in the future. The county of greatest concern is Lee County, Virginia, because its three-year average unemployment rate teeters on the distressed threshold. Viewing the rounded, computed data, this county appears to be distressed, but when compared with the U.S. average, the unemployment rate misses the distressed threshold by 0.1 percent. Fortunately, the unemployment rate in Lee County has decreased in the past three years relative to the national average. If this trend continues, the county might remain in the transitional category despite its low income and high poverty rate. The economic data for Lee County and other borderline counties in fiscal year 2004 are displayed in Table 2.

**Table 2: Economic Data for Near-Miss Counties**
				Percent of the U.S. Average
	Unemployment Rate, 1999–2001	PCMI, 2000	Poverty Rate, 2000	Unemployment Rate, 1999–2001	PCMI, 2000	Poverty Rate, 2000
U.S. Average	4.3%	$25,676	12.4%	100%	100%	100%
Distressed Threshold...	>=6.5%	<=$17,203	>=18.6%	>=150%	<=67%	>=150%
OR	>=6.5%		>=24.8%	>=150%		>=200%
OR		<=$17,203	>=24.8%		<=67%	>=200%
Rockcastle County, Kentucky	6.1%*	$11,500	23.1%	141.8%*	44.8%	186.7%
Benton County, Mississippi	6.4%*	$11,693	23.2%	147.9%*	45.5%	187.4%
Lowndes County, Mississippi	6.4%*	$17,844*	21.3%	146.7%*	69.5%*	172.2%
Lee County, Virginia	6.5%*	$11,509	23.9%	149.9%*	44.8%	193.2%
Taylor County, West Virginia	6.3%*	$10,800	20.3%	145.7%*	42.1%	164.0%
Upshur County, West Virginia	6.2%*	$13,365	20.0%	143.1%*	52.1%	161.7%
BORDERLINE COUNTIES WITH STATIC POVERTY RATES
Green County, Kentucky	9.2%	$10,954	18.4%*	211.5%	42.7%	149.0%*
Swain County, North Carolina	11.7%	$12,309	18.3%*	269.6%	47.9%	147.9%*
Morgan County, Ohio	14.0%	$13,996	18.4%*	322.2%	54.5%	148.8%*
Meigs County, Tennessee	6.8%	$11,943	18.3%*	157.7%	46.5%	147.9%*

* Borderline data are identified by an asterisk.

State-Level Analysis
Twelve of the 13 Appalachian states will experience changes in the economic status of counties in fiscal year 2004. Table 3 shows that the number of distressed counties will be reduced in all nine states that previously contained distressed counties. Kentucky, Ohio, and West Virginia will experience the greatest reduction of distressed counties overall. In addition, Pennsylvania's two distressed counties will graduate to the transitional category. In fiscal year 2004, the 91 distressed counties will be located in 8 of the 13 states with concentrations in Central and Southern Appalachia.

Table 3: Comparison of Counties per Economic Level by State in FY 2003 and FY 2004

**FY 2003 Designations**
State	Distressed	Transitional	Competitive	Attainment	Total
Alabama	7	27	2	1	37
Georgia	0	27	8	2	37
Kentucky	42	9	0	0	51
Maryland	0	2	1	0	3
Mississippi	14	10	0	0	24
New York	0	13	1	0	14
North Carolina	3	20	3	3	29
Ohio	11	17	1	0	29
Pennsylvania	2	47	2	1	52
South Carolina	0	4	1	1	6
Tennessee	10	39	0	1	50
Virginia	5	17	1	0	23
West Virginia	27	27	1	0	55
Total	121	259	21	9	410

**FY 2004 Designations**
State	Distressed	Transitional	Competitive	Attainment	Total
Alabama	5	30	0	2	37
Georgia	0	29	5	3	37
Kentucky	35	15	1	0	51
Maryland	0	2	1	0	3
Mississippi	12	12	0	0	24
New York	0	14	0	0	14
North Carolina	1	21	6	1	29
Ohio	6	22	0	1	29
Pennsylvania	0	49	2	1	52
South Carolina	0	5	1	0	6
Tennessee	8	39	3	0	50
Virginia	3	19	1	0	23
West Virginia	21	32	2	0	55
Total	91	289	22	8	410

At-Risk County Analysis

The increased number of transitional counties prompted a look into the "at-risk" category to reveal changes for fiscal year 2004. Although it's not used for the distribution of ARC funds, the at-risk category helps to identify transitional counties with economic characteristics that border on the distressed threshold. At-risk counties have a per capita market income that is two-thirds of the national average or less, a three-year average unemployment rate that is at least 125 percent of the national average, and a poverty rate that is at least 125 percent of the national average. With the inclusion of Census 2000 poverty rates in the fiscal year 2004 designation, the number of at-risk counties would increase from 42 to 51. Table 4 reveals the change in the distribution of at-risk counties among the 13 states. Notable changes include the creation of at-risk counties in New York and North Carolina and the removal of the at-risk county in Maryland. Overall, the combined number of distressed and at-risk counties would decrease from 163 to 142 counties between fiscal year 2003 and fiscal year 2004—a net decrease of 21 counties. See Table 5 and Map 3 for the distribution of at-risk counties in the Appalachian Region.

**Table 4: Comparison of "At-Risk" Counties by State for FY 2003 and FY 2004**
State	At-Risk Counties FY 2003	At-Risk Counties FY 2004
Alabama	8	10
Georgia	1	1
Kentucky	1	4
Maryland	1	0
Mississippi	4	4
New York	0	2
North Carolina	0	2
Ohio	4	5
Pennsylvania	1	3
South Carolina	0	0
Tennessee	10	6
Virginia	3	2
West Virginia	9	12
Total	42	51

Table 5: "At-Risk" Counties by State for FY 2004

Alabama
Clay
Etowah
Fayette
Lamar
Marion
Randolph
Talladega
Tallapoosa
Walker
Winston

Georgia
Elbert

Kentucky
Edmonson
Green
Pike
Rockcastle

Mississippi
Benton
Calhoun
Monroe
Tippah

New York
Allegany
Cortland

North Carolina
Swain
Yancey

Ohio
Adams
Gallia
Guernsey
Jackson
Morgan

Pennsylvania
Fayette
Forest
Greene

Tennessee
De Kalb
Jackson
Meigs
Morgan
Overton
Pickett

Virginia
Lee
Russell

West Virginia
Grant
Greenbrier
Marion
Marshall
Pocahontas
Raleigh
Randolph
Taylor
Tucker
Tyler
Upshur
Wayne

Appendix 1: Fifty-one Counties with Shifting Economic
Status between FY 2003 and FY 2004
State	County	FY 2003 Status	FY 2004 Status	Positive/Negative Change
Alabama	Fayette	Distressed	Transitional	+
	Madison	Competitive	Attainment	+
	Morgan	Competitive	Transitional	-
	Winston	Distressed	Transitional	+
Georgia	Cherokee	Competitive	Attainment	+
	Habersham	Competitive	Transitional	-
	Hall	Competitive	Transitional	-
Kentucky	Clark	Transitional	Competitive	+
	Edmonson	Distressed	Transitional	+
	Green	Distressed	Transitional	+
	Hart	Distressed	Transitional	+
	Lincoln	Distressed	Transitional	+
	Pike	Distressed	Transitional	+
	Rockcastle	Distressed	Transitional	+
	Rowan	Distressed	Transitional	+
Mississippi	Benton	Distressed	Transitional	+
	Monroe	Distressed	Transitional	+
	Tishomingo	Distressed	Transitional	+
	Webster	Transitional	Distressed	-
New York	Broome	Competitive	Transitional	-
North Carolina	Alexander	Transitional	Competitive	+
	Cherokee	Distressed	Transitional	+
	Davie	Attainment	Competitive	-
	Polk	Attainment	Competitive	-
	Swain	Distressed	Transitional	+
Ohio	Adams	Distressed	Transitional	+
	Clermont	Competitive	Attainment	+
	Gallia	Distressed	Transitional	+
	Jackson	Distressed	Transitional	+
	Monroe	Distressed	Transitional	+
	Morgan	Distressed	Transitional	+
Pennsylvania	Fayette	Distressed	Transitional	+
	Greene	Distressed	Transitional	+
South Carolina	Greenville	Attainment	Competitive	-
	Oconee	Competitive	Transitional	-
Tennessee	Bradley	Transitional	Competitive	+
	Grundy	Transitional	Distressed	-
	Hamilton	Attainment	Competitive	-
	Jackson	Distressed	Transitional	+
	Loudon	Transitional	Competitive	+
	Meigs	Distressed	Transitional	+
	Morgan	Distressed	Transitional	+
Virginia	Lee	Distressed	Transitional	+
	Russell	Distressed	Transitional	+
West Virginia	Jackson	Distressed	Transitional	+
	Pocahontas	Distressed	Transitional	+
	Putnam	Transitional	Competitive	+
	Raleigh	Distressed	Transitional	+
	Randolph	Distressed	Transitional	+
	Taylor	Distressed	Transitional	+
	Upshur	Distressed	Transitional	+

Additional Materials

Appendix 2: County Economic Status in the Appalachian Region, FY 2003 and FY 2004
PDF file (51 KB) | Excel file (146 KB)

County Economic Status by State, FY 2003 and FY 2004
PDF file (72 KB) | Excel file (174 KB)

Criteria for County Economic Levels, FY 2003 and FY 2004
PDF file (17 KB) | Excel file (25 KB)

Map 1: County Economic Status in Appalachia, FY 2003 (PDF file—398 KB)

Map 2: County Economic Status in Appalachia, FY 2004 (PDF file—398 KB)

Map 3: County Economic Status in Appalachia, FY 2004 (Includes the At-Risk Category) (PDF file—399 KB)

A complete copy of this information is available in PDF format (1.3 MB).