Topeka Gov. Sam Brownback is embarking on an experiment that he says he hopes will help revitalize rural areas of Kansas that have experienced consistent loss of population for decades.
Brownback, a Republican who took office in January, pushed through with relative ease a proposal that designates 50 counties as rural opportunity zones, and provides a state individual income tax exemption for people who move into those counties from out of state.
It also authorizes those counties to participate in a state-matching program to repay student loans of up to $15,000 for students who move to those counties.
“I’m already getting a lot of feedback on this,” Brownback said at a recent news conference.
He signed the measure into law last week, and today plans to conduct ceremonial signings in Belleville, Colby, Wichita and Yates Center.
He said the proposal will give the designated counties another tool to recruit doctors, dentists, retirees and others.
“I think it has an opportunity to grow an area of the state,” he said.
Lea Ann Seiler, economic development director for Hodgeman County, said she will use the new law to promote her area.
“From an economic development standpoint, we think it will be wonderful,” Seiler said.
Like many rural counties, Hodgeman, which has a population of about 2,000, has already put in place incentives to lure people, including providing some funds for people who build new homes.
Seiler said she hoped the student loan repayment provision would bring in some recent graduates, although she said it will be difficult for the county to find the funds to match that program.
“County coffers are tight now,” she said.
Under the law, those who qualify would receive a full tax credit against their state income tax liability. They must have been living outside the state for five or more years prior to establishing residency in the rural opportunity zone.
Under the student loan repayment plan, the eligible counties would be authorized to adopt resolutions to participate and pay half of certain student loan costs. The maximum amount would be $15,000, which the state and county would split.
The tax exemption will reduce funds to state coffers by $1.5 million in its first year, and $4.4 million in its second year, according to state estimates. Brownback has recommended transferring $1.3 million in economic development funds to the Kansas Department of Commerce to cover the student loan repayment program.
Seiler said she doesn’t believe there will be any hard feelings from people who already live in those counties and aren’t getting the tax break. Supporters of the measure say they hope the new law will benefit all by increasing economic activity.