The State of North Carolina pours millions of dollars more per capita into into the state’s 85 rural counties yet still half of the state’s 100 counties have lost population since 2010.
Those rural counties that haven’t lost population usually owe it to being within the commute zones to metro areas such as Durham where non-resident commuters hold down 2 out of every 3 jobs.
Not only do commuters not help shoulder their share of the costs for quality of life and sense of place amenities that make work-side communities such as Durham so appealing to job creators, those that create sprawl push the costs off onto others.
In other states, commuters often pay a very small payroll tax to compensate the cities to which they commute, but instead, North Carolina continues to make residents of urban areas subsidize those from rural counties.
For instance, the special transit taxes levied to relieve the congestion commuters create is levied not on the counties where they choose to live, but on the residents in urban counties who already choose to live closer to their jobs.
Now a few state legislators want instead, to further worsen that inequity by letting commuters and daytrip visitors from rural counties take home any sales tax revenues they generate work-side or there as tourists for purposes other than work or school.
These examples show a fundamental lack of understanding of the basics of economic development and the unintended consequences of other wealth transfers when the state builds or improves roads to and from rural counties that are not warranted by traffic.
Economists and others who measure economic impact and generation separate economic development into supply-side and demand-side. Ribbon-cutting officials usually focus on supply-side such as paying incentives for businesses to relocate or expand.
Demand-siders such as those familiar with visitor-centric economic development know that this is the surest and purest way to generate economic development and impact.
A decade ago, many of us coalescing around statewide tourism issues suggested that the state tourism development be refocused on rural counties including the development of capacity there to draw tourism from the state’s urban areas.
This dawned on some of us when it was revealed that 80% of the state’s tourism related tax revenues are generated by the state’s urban areas.
This impact was generated when counties were given the option of shouldering special taxes on visitors to self-fund visitor promotion that is collectively many times greater than that budged by the state.
Some of us proposed that the state should refocus its entire tourism promotion budget in support of rural counties including helping them promote instate visitation from urban areas.
Tourism in rural areas appears to be a “chicken and egg” dilemma, but it really isn’t. It doesn’t begin with recruiting hotels, which don’t create visitor demand, but are built to serve it.
Tourism begins in rural area with “retained tourism.” This is when a rural area takes a full inventory of its assets and locally-grown businesses, features and events and works to encourage residents there buy and experience local.
State tourism officials could then begin to shape those local assets into tourism identities by conducting marketing designed to encourage residents of urban area to experience these rural areas on day-trips.
They won’t have to encourage me. I love riding our Harley Cross Bones through rural North Carolina and nothing more than discovering a local restaurants or store there.
As the volume of day-trippers grows to these areas, residents will develop bed and breakfast inns and as promotion of the assets in these communities fills those rooms, other types of commercial lodging will take an interest.
Existing and new home-grown stores, restaurants, features and events, bolstered by “retained tourism” from residents as well as daytrip and then overnight visitors, will gradually expand capacity and become more sustainable.
This is also the best way to draw the attention of entrepreneurs seeking to start new businesses or executives seeking to relocate or expand because more than 80% visit areas as tourists before announcing their search.
The formula works, but it takes patience and learning to appreciate those things that make each rural area distinct. It also requires that the state help to protect these areas from blight such as billboards and teaching that traditional advertising is no longer an effective marketing strategy, particularly on a small budget.
Residents of urban areas, such as me, love North Carolina’s rural character, especially when it is safeguarded from blight.
We want its rural character to be sustainable and to thrive but not through the misguided examples of those urban areas which have fallen for “built it and they will come” supply-side ruse only to sell out their sense of place and soul to mainstream interests.
This, tragically, will make them indistinct and unworthy of love and eventually visitation.
Helping rural areas makes sense, but it won’t be achieved as some in the legislature are trying to do now by pitting rural areas against urban areas as well deconstructing urban areas by redistributing even more wealth and permitting special interests such as billboards to once again defile them.
Instead, state policy makers should incentivize rural areas to learn from the mistakes of many urban areas including the failure to index population growth to developable land while factoring in the value of forest, open space, historic scenic preservation.
Maybe a good start is for the course elected officials take to include an understanding of demand-side economic development.