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Small Towns Trends and Issues


This statistical examination of North Carolina's small towns covers a range of social and economic conditions. The demographic data are drawn from the U.S. Census and represent the year 2000, unless otherwise noted. Data about town governance and finance were supplied by the N.C. League of Municipalities, the Office of the State Treasurer and the N.C. Division of Community Assistance.


In these tables and descriptions, the term "municipality" may refer to an incorporated area of any size. "Small town" refers to municipalities with fewer than 10,000 people, except where even smaller sizes are noted.


References to urban and rural counties are consistent with definitions used by the N.C. General Assembly in various state statutes and based on the population at the time of the 1990 Census. According to this usage, rural counties (85 in all) have a population density of fewer than 200 people per square mile. Urban counties are the 15 counties with higher density population.


Mention also is made of North Carolina's three major geographic regions: the Coastal Plain, or eastern counties; the Piedmont, or central counties; and the Mountains, the westernmost counties. These regions have longstanding distinctions based on culture and economy as well as geography.


Small towns and their residents

Most N.C. municipalities remain small
The 2000 Census represented a milestone for North Carolina. It showed, for the first time, that one-half the state's residents now live in incorporated areas. This turning point was largely attributed to the explosive growth of the state's largest cities, among them, Charlotte, Raleigh, Cary and Durham. But municipalities come in all shapes and sizes, and the vast majority of North Carolina's are small towns. Of 547 municipalities in 2004, 478 had populations under 10,000, and they were home to 919,783 people. The tiniest among them is Love Valley, population 33.


Small towns dot the eastern landscape
Nearly half of all municipalities in North Carolina lie in the Coastal Plain. This is despite the fact that three eastern counties (Camden, Currituck and Hyde) have no municipality at all. With 19, Brunswick County more than makes up for them. The mountains hold the fewest municipalities of any region, with 84. Statewide, 13 counties — mostly in the west and the northeast — have only one municipality each. The overwhelming majority of municipalities in the Coastal Plain and Mountains are small towns with fewer than 10,000 people. The Piedmont, on the other hand, includes the state's five largest cities.


Small towns represent a big part of rural counties
Although "rural" conjures up the image of open countryside, more than 80 percent of N.C. municipalities lie in the state's 85 rural counties. Most municipalities in rural counties are small: 92 percent have fewer than 10,000 people; about half have fewer than 1,000 residents. Three cities in rural counties, however, support populations of 50,000 or more: Rocky Mount, Greenville and Jacksonville. Overall, approximately one-third of the rural North Carolina population lives within an incorporated area.


Outside urban areas, the smallest towns struggle to stay alive
Population trends show that many of North Carolina's small towns are having trouble holding their own. Between 1970 and 2000, 132 municipalities — all small towns of fewer than 10,000 people — lost population. The smallest towns suffered the most. All but four that lost population had fewer than 5,000, and four out of 10 towns with fewer than 1,000 residents lost population. On the other hand, two-thirds of the state's municipalities gained population during the same period. These include some small towns, especially those serving as bedroom communities for large cities or in areas popular among retirees. At least for the last decade of that period, most towns that gained population also increased land area. Eighty-two towns (all smaller than 5,000) increased population solely within existing town limits while 279 other municipalities added both population and land.


In 76 towns, racial minorities hold majorities
For the most part, the racial and ethnic composition of North Carolina's municipalities reflects the state as a whole, where African Americans — the largest minority group — make up 21 percent of the population. The more significant distinction is held by 76 towns where racial minorities hold majority status: 74 by African Americans and two by American Indians. Another 16 municipalities have no racial majority. Most towns with African-American majorities are in the eastern third of the state. Both towns with American Indian majorities are in Robeson County, home of the Lumbees. Most of these majority-minority towns have fewer than 5,000 residents. Hispanics, North Carolina's fastest-growing ethnic group, appear to be settling mostly in larger towns and cities rather than smaller ones.


In-migration bypasses small towns
North Carolina's booming population of recent decades has been fueled by people moving in from other states. Between 1990 and 2000 alone, more than a million people moved here from out of state. They accounted for 70 percent of the increase in population. The state's smallest towns, however, have failed to capture a significant portion of that in-migration. One result is that the smaller the town, the higher the percentage of North Carolina natives living there.


Aging population challenges long-term resilience
Residents of small towns are generally older than the state population overall. Furthermore, the smaller the town, the older the population: 65 towns with a population under 5,000 have a median age that exceeds the state's by 10 years. This means fewer workers, fewer young families, more fixed incomes and a higher need for some types of services. Although retirement communities may skew the numbers somewhat, the aging of small towns also is reflected in population trends of rural counties


Education levels are lower in small towns
Educational achievement is generally in inverse relation to town size. For example, in towns with fewer than 5,000 people, 23 percent of the population has less than a high school degree, roughly equal to the percent hold an associate's degree or higher. In cities with 50,000 or more residents, only 15 percent lack a high school degree and 42 percent earned at least an associate's degree.


Towns with deepest poverty tend to be small
Statewide, according to the 2000 Census, 12 percent of North Carolina's residents lived below the federal poverty level. In 73 towns, however, the poverty level was more than double that of the state. Of these towns, 93 percent have fewer than 10,000 residents. The vast majority are in eastern North Carolina, and more than half are towns where racial minorities hold a majority. These statistics reflect general geographic and racial disparities in income levels. Persistently high levels of poverty plague parts of the Coastal Plain, and statewide poverty among African Americans is 23 percent compared with 8 percent for whites.


Manufacturing employs large share of small-town residents
A large proportion of people living in small towns work in manufacturing: roughly 21 percent. Overall, manufacturing accounts for a dwindling share of North Carolina's economic base. In 1970, 30 percent of all North Carolina workers were employed in manufacturing. By 2000, only 15 percent statewide worked in factories.


Few live and work in the same town
Small-town residents, for the most part, travel to work outside the town limits. Only one-quarter of them live and work in the same town. One-third of small-town residents drive to jobs in another county. Despite the distances they may be covering, their commuting times are roughly the same as their counterparts in larger towns — less than 30 minutes each way.


Issues of town governance

In small towns, one person often fills multiple roles
State law requires that every incorporated municipality have a clerk charged with maintaining town ordinances, council minutes and other records. Most towns and cities also have a manager or administrator who oversees day-to-day operations and reports to the mayor or council. But more than 200 towns, all with a population of less than 5,000, have no manager. As a result, management responsibilities fall on the clerk or the unpaid mayor and council members.


Tax values can be deceptive
Some of North Carolina's smallest communities hold great wealth. In the municipality of Bald Head Island, for example, the assessed value of all private property is approximately $4 million per person. But Bald Head and other resort/retirement communities represent only a tiny proportion of small towns. Overall property values in North Carolina's small towns are lower than in larger municipalities. Still, the assessed value of all towns with populations under 10,000 totals to an impressive $83 billion.


Some of the smallest towns strain to cover basics
North Carolina's smallest towns spend the largest portion of their budget on public safety and general government operations, leaving little for capital improvements, planning, street maintenance, recreation or other programs to enhance the quality of life or promote economic development. Furthermore, a relatively large proportion of their budgets comes from intergovernmental transfers, such as grants and local shares of state-collected taxes. This indicates that the towns are unable to generate their own revenue through property taxes or utility fees.


Small towns have fewer resources
Most small towns, especially those with populations of less than 5,000, do not have the ability to raise significant local revenue for community improvements. Eighty percent of small towns of less than 5,000 score low on an ability-to-pay measure developed by the N.C. Division of Community Assistance. Used in grant-making decisions, the measure weighs population, personal income and total tax valuation to compare local governments' ability to contribute financial resources to projects. While towns of 5,000 to 9,999 score better on ability to pay than smaller towns, they nonetheless tend to score lower than municipalities of 10,000 or more.


Water and sewer capacity limits small-town growth and development
Of the 392 towns in North Carolina that run their own water and/or sewer systems, 343 are small towns of fewer than 10,000 people. This represents 71 percent of all small towns. Some of these systems are plagued witih crumbling pipes, leaks and infilitration problems. In fact, 12 percent of small town systems are under state-imposed moratoria or Special Order by Consent, suspending further growth. Many towns that have lost major industries also have lost their biggest water and sewer customers, resulting in shortfalls in operation and maintenance budgets.