Archive for Tuesday, February 1, 2005
Tax incentive idea addresses ‘brain drain’
Iowa may exempt people under 30; Kansas lawmaker intrigued by plan
February 1, 2005
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Mike Davis didn't need much extra incentive to stay in Kansas. The 29-year-old Lawrence man liked the state, and his wife's family was here.
"She doesn't want to move very far away," Davis, a lube-tech supervisor at Jiffy Lube, said of his wife, Jennifer, a 26-year-old Kansas University graduate.
Like many young Kansans, however, the couple recently kicked around the idea of making a move out-of-state. It wouldn't hurt, Davis said, if the state decided to give him a tax break to stay.
"It definitely would have been nice to have," he said. "Make it a little easier to stay, as far as making a decision."
In Iowa, a rural state like Kansas that sees a loss of young adults to big cities in other states, legislators are considering a law exempting people under 30 from the state income tax.
"Is this the silver bullet? No," Stewart Iverson, Republican leader of the Iowa Senate, told the Journal-World. "It's just one component in ... how to get young people interested in staying here."
No such proposal has come before the Kansas Legislature, but at least one member was intrigued by the idea Monday.
"There seems to be quite a bit of interest around our Legislature in property-tax relief for older Kansans," said. Sen. Derek Schmidt, R-Independence, vice chairman of the Senate Assessment and Taxation Committee. "If we're going to discuss that issue, we should discuss this as well."
Schmidt said that the "brain drain" of educated young people was an issue "percolating under the surface" at the Kansas Legislature. The state should address issues of business climate, he said, but it also should consider making Kansas a more attractive place for young people to stay.
Iowa is considering a law exempting people under 30 from state income tax. Mike Davis, 29, Lawrence, said he and his wife were considering leaving Kansas sometime soon but a tax break like that in Kansas would make them reconsider. Davis was at work Monday at Jiffy Lube.
Iowa has long been afflicted by slow growth rates, Iverson said. Between 1900 and 2000, he said, the state was the only one in the nation not to at least double its population.
And census figures reveal that, between 1995 and 2000, more than 9,000 young, single, college-educated people moved to Iowa -- but more than 20,000 left.
That has officials there searching for answers.
"Let's do something to spark discussion," Iverson said.
The demographic trends in Kansas aren't much better. Between 1995 and 2000, more than 11,000 college-educated adults moved to Kansas, but more than 16,000 left.
Other census surveys show Kansas has one of the slowest population growth rates in the nation and that most of the state's counties are actually losing residents.
"A lot of them want to go elsewhere," David Gaston, director of career services at Kansas University, said of students considering career options. "A lot of it is what their career values are -- is it making a lot of money, or is it staying near friends or families?"
An exemption from income taxes might help the money side of that ledger. David Interiano, 21, a KU senior in human biology, liked the idea.
"I think that would be a marvelous idea," he said Monday afternoon. "It'll attract people to come to Kansas -- and people who want to leave Kansas, it would make them stay here."
Talent gone?
There is skepticism, however.
"I don't think that really necessarily means people would come back to the rural part of the state," said Kansas Sen. Terry Bruce, a Hutchinson Republican who serves on the taxation committee. "I think the reason people are leaving is because there aren't any opportunities, period. It's often not a matter of choice."
He added: "I think our efforts are best used to increase economic activity across the state."
Iowa's Iverson said his state had made other moves, including offering tax incentives to businesses for every new job created that pays more than $10 an hour. The tax exemption, though, would result in about $600 annual savings for young taxpayers in Iowa.
"We've got a lot of people talking about it," Iverson said.
A tax break for young adults, Schmidt said, "probably ought to be" discussed in Kansas.
Schmidt, a 1990 KU graduate, said he had seen a number of his talented peers leave Kansas.
"There are a significant number that have gone elsewhere," he said. "We'd like to have that talent stay."
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