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Analysis of Economically Distressed Counties

View distressed counties on a map.

As of March 2009

Note: The county list represents the point in time FHWA selected to be the basis for choosing the original Recovery Act highway project lists.

The Recovery Act requires that in selecting projects to be funded by federal stimulus dollars, priority be given to “economically distressed counties.” This is one of several considerations that states must address, including assisting those most impacted by the recession; investing in transportation projects with long term economic benefits; and selecting projects that can be completed within three years.

Of the projects selected by the Governor and Legislature:

  • Per capita Recovery Act spending in the state’s 28 federally-defined economically distressed counties is expected to be $86 per person, compared to $52 per person in the state’s 11 non-economically distressed counties. *
  • Total Recovery Act spending in these 28 counties is expected to be approximately $347.5 million, or 71% of the total. *
  • Recovery Act funding is being supplemented by over $1 billion in state and local funds for a total investment of over $1.5 billion that is building projects and putting people to work in Washington. Approximately 69% of the total investment, including leveraged funds, is planned to be spent in economically distressed counties.

This analysis is based on data as of November 2010, but can be considered current because there have not been changes to the Recovery Act funded highway projects lists significant enough to impact this analysis.

What are the goals of the American Recovery and Reinvestment Act?

In the Recovery Act’s introduction, its purpose includes the following five goals:

  1. To preserve and create jobs and promote economic recovery.
  2. To assist those most impacted by the recession.
  3. To provide investments needed to increase economic efficiency by spurring technological advances in science and health.
  4. To invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits.
  5. To stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.
What other considerations are cited in the Act for selecting highway projects?

The Act states that “in selecting projects to be carried out with funds apportioned under this heading, priority shall be given to projects that are projected for completion within a 3-year time frame, and are located in economically distressed areas.”

What is the definition of “economically distressed” areas?

The federal definition of “economically distressed,” is based on a county having:

  • per capita income of 80 percent or less than the national average;
  • an unemployment rate one percent greater than the national average for the past 24 months; or
  • unemployment or economic adjustment problems, “special need” as determined by the Secretary of Commerce.

The federal per capita income data used for this assessment represents 2006 figures and the employment data represents January 2007 to December 2008 figures. The “special need” definition was clarified on by FHWA on August 24, 2009, which established that a county with business closures or restructuring that resulted in a sudden drop in employment greater than 1% of the county labor force in the past 12 months qualifies as economically distressed.

Specifically, if a State believes that an area that does not meet the economically distressed criteria in section 301(a)(1) or (2) of PWEDA (42 U.S.C. 3161) relating to the area's unemployment rate or per capita income) is nonetheless economically distressed, the State may consider whether such area meets the special need criteria under PWEDA by determining whether the area satisfies one or more of the criteria described below. An "area" may be a region, county, municipality, a smaller area within a larger community, or other geographic area. (See 42 U.S.C. 3161(b)). If a State intends to rely on any of the criteria listed below, it must provide to the FHWA Division Office documentation demonstrating satisfaction of the criteria.

Documentation for counties that meet the “special need” provision

Spokane County

Under the definition of economically distressed pursuant to the "special need" provision, Spokane County meets the federal criteria for economically distressed. Examples of businesses that have dislocated employees in the past 12 months include:

  • General Dynamics (353 jobs)
  • Agilent Technologies (120 jobs)
  • Columbia Lighting (211 jobs)
  • Itronix (300 jobs)
  • Guardian Life Insurance (39 jobs)

Washington State’s Economic Security Department (ESD) analyzed the Quarterly Census of Employment and Wages employment series, which is based on the quarterly unemployment insurance tax forms employers file with the agency. Because this is a quarterly report and has a 6-9 month lag, ESD used 4th quarter 2008 data— the first quarter that the effects of the recent recession was evident in data—and compared it to 4th quarter 2007. This analysis only looked at companies with a drop of 10 or more employees, and found a drop of 8,761 in employment— substantially higher than the necessary 1% of the labor force.

King County

Under the definition of economically distressed pursuant to the "special need" provision, King County meets the federal criteria for economically distressed. Examples of businesses that have dislocated employees in the past 12 months include:

  • Washington Mutual HQ (3,400 jobs)
  • Microsoft (2,072 jobs)
  • Kenworth Trucking (430 jobs)
  • TM Technologies (369 jobs)
  • Quest (235 jobs)

Again, ESD analyzed the Quarterly Census of Employment and Wages employment series. This analysis found a drop of over 40,000 in employment— substantially higher than the necessary 1% of the labor force.

Another approach involved reviewing Mass Layoff Statistics (MLS) data to answer the same question. MLS data comes from people filing for unemployment insurance. ESD collects an applicant’s “last employer” and aggregates the employers reported. In the time period from October 2008 to current, there were 24,237 separations. However, this includes companies in King County as well as companies that have multiple locations, making it impossible to identify which location an applicant worked at if a company has locations in multiple counties. This information is available from ESD’s layoff notices worker adjustment and retraining notification (WARN) system.

How many economically distressed counties are there in Washington?

There are 28 counties in Washington that meet this set of criteria, 26 through the per capita income and unemployment rate criteria, and at least two through the “special need” provisions. However, Washington State has not fully evaluated the impact of the new special need criteria. Given the recession’s impact on the state, it is likely that more counties qualify as economically distressed than are represented in this analysis.

The 28 federally defined economically distressed counties in Washington are:

  • Adams
  • Asotin
  • Clallam
  • Clark
  • Columbia
  • Cowlitz
  • Douglas
  • Ferry
  • Franklin
  • Garfield
  • Grant
  • Grays Harbor
  • King (special need)
  • Kittitas
  • Klickitat
  • Lewis
  • Lincoln
  • Mason
  • Okanogan
  • Pacific
  • Pend Oreille
  • Skamania
  • Spokane (special need)
  • Stevens
  • Wahkiakum
  • Walla Walla
  • Whitman
  • Yakima

* This analysis does not include approximately $1.2 million that is funding projects that cannot be attributed to a single county, including funding for statewide rumble strip and cable median barrier safety buckets.

Last revised on April 03, 2014