Kansas senators have expressed skepticism about the effectiveness of Gov. Sam Brownback’s Rural Opportunity Zones program.
Some Republican and Democratic lawmakers are questioning whether the program, which is designed to pull people into the state’s rural areas, will actually help rural economies.
Sen. Mary Pilcher-Cook, a Shawnee Republican, said senators need a “bigger picture” to evaluate whether the program is striking the right balance in fostering public vs. private growth.
“I think it’s so important to keep in mind that it takes a certain percentage of employment in the private sector to support those in the public sector, and when that gets out of balance, that’s when you lose population because the taxes become way too high,” Pilcher-Cook said.
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The program, which covers 77 counties that make up a large portion of western and southeastern Kansas, provides incentives such as student loan forgiveness and waived income taxes to persuade people to move to rural areas.
People who move to participating counties are potentially eligible for loan repayment, while people who have never been in Kansas or have lived out of state for several years can waive income taxes for up to five years.
The Department of Revenue estimates that 330 people will have received income tax waivers for 2014, which will cost the state about $800,000 in revenue.
Chris Harris of the Business and Community Development Division of the Kansas Department of Commerce told the senators Wednesday that those individuals will make a combined total of $29.9 million, which he says will have an economic impact of $44 million in the state.
“It is designed to address population loss, the population loss problem that has spanned decades and spanned generations and has come to define how we think about rural Kansas,” Harris said. “Over the course of the last several years, we have found, we believe (the program) is a very effective and proven tool to address this issue.”
In fiscal 2015, the program has provided $1.2 million in student loan repayment. People who move to rural areas are eligible for up to $15,000 in loan forgiveness.
Most of the program’s applicants work in health care or education, both sectors that receive public funds.
If the state is going to work on retaining its rural base, is the program “the way to do it or do we need to be looking at a different combination of incentives?” asked Sen. Tom Holland, a Baldwin City Democrat.
The program does have the support of Sen. Robert Olson, an Olathe Republican, who said something has to be done about the aging rural population.
According to Harris, 35 of the original 50 counties in the program, which started in 2011, have seen improvements in their average population when compared with their average populations over the previous 40 years.