Center Says Eastern North Carolina Lags the State on Infrastructure, Human Needs

Eastern North Carolina – despite areas of bright promise – ranks behind the Western and Piedmont parts of the state on a wide range of indicators, from education levels to income and poverty rates, to having the necessary infrastructure in place to help the region grow. These are the findings in a new study by the North Carolina Center for Public Policy Research released today.

“The East suffers a double whammy,” says Mike McLaughlin, editor of North Carolina Insight, the Center’s magazine. “Not only is the region behind, but it doesn’t have the tools in place to catch up. It’s going to take a serious, long-term commitment to get the region on par with the rest of North Carolina.”

The Center’s findings are published in an edition of North Carolina Insight focusing exclusively on opportunities and challenges facing Eastern North Carolina. Home to some of the state’s most persistent poverty, the region had been buffeted by falling agricultural prices, environmental issues related to hogs, health issues around tobacco, and heavy job losses in manufacturing. Massive storm damage from Hurricane Floyd exacerbated an already precarious position for the region, and the Center’s research suggests the state as a whole may suffer unless the East receives the necessary attention to build its economic health.

The Center says conditions in the East represent a significant barrier for Gov. Mike Easley in realizing the goal of “one North Carolina” outlined in his Inaugural Address last January. Easley said then, “We are one State, one people, one family bound by a common concern for each other. Our economic and educational development must reflect this common spirit of purpose as we build our future.” Easley further promised that “every child – whether born in the mountains of the West, the beaches of the East, or the sand hills and foothills between – will have a fair opportunity to reach his or her potential.”

How Does the East Compare to the Rest of North Carolina on Human Resources?

The Center’s study found Eastern North Carolina trails the rest of the state on a broad range of human resources indicators that suggest an “opportunity gap” for this region of the state. These include:

* Poverty – At 17.6 percent, the average poverty rate for eastern counties greatly exceeds the North Carolina average of 12.6 percent and the U.S. average of 13.3 percent. Poverty rates exceed 20 percent in 11 of the 41 Eastern counties, and all but five Eastern counties exceed the statewide average. Poverty rates varied greatly for the East, ranging from a low of 8.1 percent in Dare County to a high of 25.7 percent in Tyrrell County – the highest in the state.

* Education – The Center also found the East lags the state in education, with the highest dropout rates, the lowest levels of adult literacy, and the lowest percentage of residents with high school and college degrees. A statewide look at literacy by the North Carolina Literacy Resource Center, for example, found that Eastern North Carolina has far more adults clustered at the lowest level of adult literacy than either the Piedmont or mountain region of the state.

Despite literacy programs offered by the N.C. Department of Community Colleges, it is obvious that many adults are not being reached, and the problem is most acute in the East. “The old explanation that lots of people are older and therefore less educated than today’s youth doesn’t fit anymore,” says Mary Dunn Siedow, director of the N.C. Literacy Resource Center. “We’ve been talking about this for 40 years, so I say to myself, ‘What’s going on here?’ Somehow, we’re replenishing a portion of the population that can’t read or write.”

Poverty and school performance also clearly are intertwined. Excluding state institutions and charter schools, the N.C. Department of Public Instruction labeled 13 public schools as low performing for the 2000-2001 school year. Of these, 10 are located in Eastern North Carolina counties, all of which have poverty rates above 18 percent.

* Unemployment – Eastern unemployment rates, averaging 5.5 percent for the year 2000, are higher than the state average of 3.6 percent and exceed the unemployment rates for the Piedmont and mountain counties. The Center’s analysis found this to be a long-term problem, with the East’s average unemployment the highest in the state from 1990-2000, an 11-year period. In October, Robeson County’s monthly unemployment rate reached 12.5 percent – the highest in the state. Manufacturing jobs are being lost at a faster clip than in the industrialized Piedmont, though not as fast as in the mountain region. These generally are being replaced by lower-paying service sector jobs, if they are replaced at all.

* Per Capita Income – As a region, Eastern North Carolina’s counties have the lowest per capita income of the state’s three regions, at $20,536. That’s 22 percent lower than the Piedmont’s $25,088 and 9 percent lower than the mountain counties’ average of $22,409.

* Population Loss – All three counties that lost population in the 2000 Census – Bertie, Edgecombe, and Washington – are located in Eastern North Carolina. In the 1990 Census, 14 of North Carolina’s 19 counties that lost population were in the East. By contrast, a handful of coastal counties – Brunswick, Currituck, Dare, New Hanover, and Pender – are growing almost too rapidly, straining the infrastructure that supports growth – such as schools, housing, and water and sewer facilities.

Does Eastern N.C. Have the Physical Infrastructure Necessary To Close the Gap?

Besides looking at human statistics such as education levels, income, and poverty, the Center also examines whether Eastern North Carolina has the necessary infrastructure in place to close the opportunity gap with the rest of North Carolina. The Center says six physical infrastructure needs influence a region’s growth potential. These are: water and sewer availability; highways; available and affordable housing; Internet access; speculative or “shell” buildings to attract new and expanding industry; and natural gas availability. Here again, the Center found the region’s infrastructure behind in virtually every area investigated.

* Water and sewer availability – Of the $800 million in water and sewer bonds authorized statewide by the voters in 1998, 58 percent of the total has flowed to the East. However, the Center found the East still faces $1.5 billion in additional needs. Many of Eastern North Carolina’s small towns don’t have water and sewer systems at all, and many other systems within the region are operating at capacity. Experts agree that having water and sewer available is the key infrastructure component necessary for growth. In many areas of the region, septic systems are not an option. The ground won’t accept septic tank discharge in, for example, parts of Bertie, Chowan, Camden, Currituck, Gates, Hertford, Pasquotank, and Perquimans counties.

The need is broadly recognized, but the difficulty is in finding a way to pay for additional water and sewer for towns too small and poor to go it alone. The N.C. Rural Prosperity Task Force, in a report issued in 2000, recommended another statewide bond issue for rural water and sewer needs, this one to the tune of

$1 billion. And, North Carolina Citizens for Business and Industry, the statewide Chamber of Commerce, has recommended creating a dedicated funding stream from state funds to pay for water and sewer infrastructure improvements.

* Highways – Eastern North Carolina has long viewed itself as behind the curve on securing highway improvements. Bumper stickers sporting slogans like “Pray for Me: I Drive on Highway 17” can be seen frequently on cars traveling over-taxed two-lane highways throughout the region. The East still faces a roads deficit, with problems such as too many stoplights on U.S. 70 to the State Port at Morehead City. Three counties – Hoke, Hyde, and Pamlico – are as yet unapproved for any four-lane highway within their boundaries. However, there have been major improvements over the past two decades, with the completion of U.S. Interstate 40 to Wilmington and the four-laning of U.S. highways 64, 70, 74, and 264. In the next decade, plans for North Carolina’s “Intrastate System” call for four-laning of large portions of U.S. highways 13, 17, 24, 58, and 87, and improvements to other roads.

Statistically, the counties in the N.C. Department of Transportation’s three Eastern regions have a greater percentage of the state’s Intrastate system to be completed than the rest of the state, but plans call for those counties to get more funding to do more paving than other regions by 2008.

* Housing – Eastern North Carolina is hurting badly in terms of both availability and affordability of housing. The region lost thousands of homes to flooding from Hurricane Floyd in 1999. Both owner- occupied and rental units were hugely affected, with some 8,000 homes destroyed and nearly 67,000 substantially damaged. The U.S. Department of Housing and Urban Development’s (HUD) first survey of housing after the flood estimated that more than 135,000 people in the 41 Eastern North Carolina counties lived in housing that is either unaffordable, inadequate, or overcrowded. Many rental units were destroyed, and the flood drove many more low-income homeowners into the rental market, drying up availability and driving up costs. According to HUD, renters in Eastern counties are three times more likely to pay more than a quarter of their total income in rent than renters in the rest of the state. Eastern homeowners are twice as likely to pay more than 20 percent of their total incomes for homes as those in the rest of the state.

The housing shortage affects not only the impoverished but people in lower paying but critical professions such as teaching. Such factors as high-cost housing can contribute to greater teacher turnover in rural areas, where school systems cannot afford to pay supplements as high as those paid by wealthier counties. The teacher turnover rate for school systems in the East for the 1999-2000 school year was 14.5 percent compared to 13.2 percent statewide.

“Without affordable housing, rural counties become like minor league training clubs – the wealthy systems take the best and leave the rest,” says Jim Causby, Johnston County school superintendent.

* Internet Access – According to a study by the U.S. Department of Commerce, only about 35 percent of N.C. households have access to the Internet, ranking the state 45^th. And, compared to other regions of the state, Eastern North Carolina generally has fewer people who own home computers or are connected to the Internet. A study prepared for the N.C. Rural Internet Access Authority found that only 11 of the 41 counties meet or exceed the statewide average of having at least 62.1 percent of their population within range of possible high-speed Internet access. The same study indicated that 57 percent of the people in one part of Eastern North Carolina did not necessarily consider home access to the Internet to be a worthwhile goal. Yet increasingly, both commerce and education demand the ability to navigate the Internet with speed. The state has allocated $30 million to the Rural Internet Access Authority to wire Eastern North Carolina fully, but whether that will be enough to accomplish the task in a timely fashion remains a significant question.

* Shell Buildings – Speculative buildings, or “shells” as economic developers call them, increasingly are viewed as necessary tools to attract new or expanding industry. Eastern North Carolina is a leader in this area, with nearly half the region’s counties (19 of 41) having constructed shell buildings compared to only 23 of the 59 counties in the rest of the state. Shell buildings can be risky as counties stand to lose their investment if nobody buys the building. Yet many in the economic development world say shells are necessary as a means of getting prospective new industry to look at their county or to keep expanding industry from leaving. “I hope I never sell it,” says Rocky Lane, economic developer for Halifax County, of a 50,000 square foot building his county built in 1998. Since the building was completed, more companies have come to look at the county as a prospective site. Ironically, if Lane sells the shell, he says his county could drop off the list of prospective locations for new industry.

* Natural Gas Availability – Persons involved in economic development indicate that many deals with new or relocating industry hinge on whether natural gas is available in a county. Of the 20 North Carolina counties currently without natural gas service, 14 are in Eastern North Carolina. Although plans are on the drawing board to serve all of these counties, the extension of natural gas lines is several years from completion and subject to complications.

While Eastern North Carolina is making progress in each of the six areas of infrastructure need, Hurricane Floyd exposed the magnitude of the water and sewer need and greatly exacerbated the shortage of affordable housing. And, the infrastructure deficit down East is exacerbated by problems such as high poverty, high unemployment, and a less educated work force. The Center’s research clearly shows that in order to close the opportunity gap, some type of organized intervention is necessary to address the broad array of problems besetting Eastern North Carolina. “After all,” says the Center’s McLaughlin, “You can’t see your way to a solution unless you open your eyes to the problems.”

The N.C. Center for Public Policy Research is an independent, nonpartisan, nonprofit created to study public policy issues facing North Carolina and to evaluate state government programs. The Center receives general operating support from the Z. Smith Reynolds Foundation in Winston-Salem, 11 other foundations, 190 corporate contributors, and almost 1,000 individual and organizational members across the state. The Cemala Foundation of Greensboro, N.C., the James M. Cox Foundation of Atlanta, Ga., and the Weyerhaeuser Company Foundation of Federal Way, Washington, and New Bern, N.C., also supported this special issue of Insight on issues affecting Eastern North Carolina. In addition to publishing North Carolina Insight, the Center also publishes book-length research reports, a citizens’ guide to the legislature, and textbooks for teachers of state and local government. The Center currently is studying governance of public universities, the charter schools movement in North Carolina, and ways to improve elections and increase voter participation.

Copies of the issue of North Carolina Insight containing the Center’s research on opportunities and challenges facing Eastern North Carolina are available for $20, which includes tax, postage, and handling. To order, write the Center at P.O. Box 430, Raleigh, N.C. 27602, call (919) 832-2839, fax (919) 832-2847, or order through the Center’s web site at http://www.nccppr.org/

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For more information on the Center’s study of opportunities and challenges facing the East, call Mike McLaughlin, editor of North Carolina Insight, at the N.C. Center for Public Policy Research at (919) 832-2839.