Each year, the Appalachian Regional Commission (ARC) ranks all 3,100 U.S. counties based on economic status, namely by their poverty rate, per capita market income and unemployment rate. In Tennessee, this data is a key metric in tracking rural prosperity, a primary focus of Gov. Bill Lee’s administration.
Currently, nine Tennessee counties are designated as “distressed,” ranking in the bottom 10% nationally, while those between 10-25% are considered “at-risk.” Despite low statewide unemployment rates, these counties face higher poverty rates and lower per capita incomes. Each year, the Tennessee Department of Economic and Community Development (TNECD) provides grants and assistance to improve these rankings.
Looking back, Tennessee has made great strides in increasing prosperity across the state’s rural regions. In 2013, 26 counties were distressed. When Gov. Lee took office in 2019, that number dropped to 15 counties statewide. By 2023, it was at a historic low of eight. From 2023 to 2024, 74% of the state’s communities improved their ranking, followed by 59% from 2024 to 2025.
Lawrence County, located in Southern Middle Tennessee, is a standout example of economic success. Once distressed in 2013, it has moved up to the transitional category, meaning it ranks in the middle 50% of the nation’s counties. This progress is a result of the community’s focus on business development and workforce initiatives. Since 2011, Lawrence County has partnered with TNECD to recruit 18 economic development projects, creating over 1,600 jobs and $300 million in capital investment. More than half of those jobs are in the automotive sector, with 65% coming from expansions of existing companies. The county has also received 66 community development grants totaling nearly $30 million to improve downtown small businesses, expand broadband infrastructure and enhance water line extensions.
“Gov. Lee often says, ‘What happens in rural Tennessee matters to every Tennessean.’ That’s not just a commitment from the State—it’s a challenge to communities,” said Ryan Egly, president and CEO of the Lawrence County Chamber of Commerce. “If Lawrence County’s success matters, we must do our part to attract new investment, create jobs, improve our schools and ensure that our people understand the many opportunities rural Tennessee has to offer. Thanks to TNECD, TVA Economic Development, Lawrenceburg Utility Systems and many other partners, we’ve been able to rise to the challenge.”
“Gov. Lee often says, ‘What happens in rural Tennessee matters to every Tennessean.’ That’s not just a commitment from the State—it’s a challenge to communities.”
Looking west, McNairy County is another rural success story. Once distressed, it moved to the at-risk category in 2020. Local leaders secured multiple grants to address two common rural challenges: access to healthcare and fire protection. Improvements included hiring a fire chief, developing an operational plan, purchasing fire trucks, upgrading equipment and expanding water infrastructure, leading to a lower ISO rating that saves residents $2 million annually in insurance costs. Additionally, with the county’s hospital closing in 2016, leaders secured $3 million in TNECD grants to rehabilitate the health department for emergency services, set to open in 2026.
“McNairy County has been without emergency healthcare since 2016,” said McNairy County Mayor Larry Smith. “Through the efforts of the local community, Gov. Lee, his staff and a TNECD grant, we are closer now than we have ever been to having emergency healthcare in our county.”
Morgan County focused on tourism to drive economic growth. In 2018, the county slipped into the distressed ranking for three years. Today, they are considered at-risk thanks to the redevelopment of Tennessee’s most famous prison, Brushy Mountain State Penitentiary. The facility sat vacant from 2009 to 2013 when the local Industrial Development Board partnered with a private investor to redevelop the site to include a concert venue, restaurant, distillery and prison tours. TNECD grants supported these efforts, funding stage construction, electrical upgrades and new lodging. Today, Brushy attracts 100,000 visitors annually.
“Without the tremendous support from the State of Tennessee, the former Brushy Mountain State Penitentiary would not have become the great asset to Morgan County that it is today. While industrial opportunity is slim in our rural area, the redevelopment of the prison has brought more economic and tourism opportunities than we could ever imagine,” said Lisa Collett, executive director of the Morgan County Chamber of Commerce. “I am entirely grateful to Pete Waddington and his partners at Brushy Mountain Group for their vision and for not giving up on Brushy or Morgan County. What once was a huge liability on the State of Tennessee has now become Morgan County’s greatest asset.”
TNECD’s Community and Rural Development division provides grants, technical assistance and other services across the state. Through the Rural Economic Opportunity program, funded by the Tennessee General Assembly and partnerships with federal agencies, TNECD has invested more than $1.2 billion in over 1,900 grants between 2020 and 2024.
While the department’s grants are critical to expanding opportunity across rural Tennessee, the true success of a community comes from strong, forward-thinking leaders who take the necessary steps to set their communities up for economic development success.
