Archive for Tuesday, February 15, 2011

Statehouse Live: Brownback administration proposes tax breaks, student loan repayments for rural areas

February 15, 2011


— Gov. Sam Brownback’s plan to give tax and student loan breaks to lure people to rural Kansas was greeted warmly by legislators on Tuesday, but they said the proposal still needs work.

Kansas Revenue Secretary Nick Jordan said the Brownback administration was trying to reverse a centurylong migration from rural counties.

“This is a very innovative and new idea on how we might repopulate and bring people back to rural Kansas,” Jordan told the Senate Taxation Committee.

Senate Bill 198 would create “rural opportunity zones” that would grant state income tax exemptions for five years to people who move from outside Kansas to any of the 40 counties in Kansas where populations have declined more than 10 percent since the 2000 Census.

And the bill would allow those counties the option of establishing a student loan repayment program that could repay student loans up to $15,000. The participating county and state would share this expense.

Brownback’s policy director, Landon Fulmer, said if enacted the proposal would show the benefits of reducing state income taxes as a way to spur economic growth. He described it as a “test-tube” program that would help policymakers in an eventual overhaul of the tax system. The state faces an estimated $492 million budget shortfall, and Brownback has said he wants to change the tax system in a way to attract more businesses and increase revenue.

But members of the Taxation Committee voiced several concerns about the proposal.

Sen. Jeff King, R-Independence, noted that the tax breaks could hurt one of the counties he represents: Cherokee County, which is one of Kansas’ poorest. Yet because its population didn’t decline by more than 10 percent, it would be ineligible to become a rural opportunity zone, while every county surrounding it would be eligible.

The effect, King said, could be that Cherokee County would be at a disadvantage with its neighboring counties in luring people and businesses.

Other members of the committee questioned why the student loan payment plan was limited to Kansas residents who went to college outside Kansas, saying it should probably apply to Kansans who stayed in the state to go to school. And there were many questions about the cost of the program.

Under the proposal, the state would cap its student loan payback portion to $1.5 million per year. The income tax exemption was expected to reduce taxes to the state treasury by $1.1 million during the first year, but officials said an exact estimate was difficult to nail down because they didn’t know how many people would take advantage of the program.

The committee appointed a subcommittee to work with the Brownback administration on questions that had arisen.


deec 7 years, 4 months ago

Since there are no jobs in some of these counties, I imagine the people moving there wouldn't pay any income tax anyway.

Katara 7 years, 4 months ago

This is not a new idea. Several communities in KS have been giving away free land to bring people into their area. Some even give you money for construction or a break on your property taxes. There have not been a lot of takers on what initially seems like a pretty sweet offer.

Katara 7 years, 4 months ago

Yes, I understand that is not really a sweet deal which is why I said "on what initially seems like a pretty sweet offer".

It sounds nice but in reality you end up on the losing side of that deal if your whole purpose was to live inexpensively.

Rawlins County is also offering free land to businesses that build in their "industrial parks". Not many takers there because businesses understand the costs outweigh the "perks" of free land and tax breaks there.

I am not even sure medical professionals would be able to do well. There is demand, yes but the costs to establish and run a medical practice would be difficult. Many argue that the cuts to Medicare & Medicaid reimbursements are the reason why there are fewer doctors in rural areas.

coderob 7 years, 4 months ago

It's going to take a lot more than $15,000 in loan repayments and a tax break to bring people in, especially for out of state grads.

Why not have a well funded arts commission instead and see how many people that brings in?

overthemoon 7 years, 4 months ago

Where is the article about committee rejecting Brownback's dissolution of the Kansas Arts Council??? Amazingly, the NEA reviewed the proposed commission order and found it too 'vague' to be able to determine if the commission would be able to qualify for Federal grants. But Brownbackward 'thought' that it might, remember? No homework, poorly presented and not ready to implement. Way to go....

tolawdjk 7 years, 4 months ago

I've said it before and I'll say it again, this tax break does nothing but turn a Wisconsinite into an illegal immigrant. Come, live in Hodgemon County! Don't pay a dime in income taxes! Use our roads! Use our schools! Should you feel under the weather, drop by the Hodgemon Co Clinic! Leech off our resources, you are from Wisconsin and we love you! Find a job in our community! Don't pay taxes on your income!

Of course you have then taken one of the limited jobs away from a hard working taxpayer here, taking food off of his table and out of his kids mouths, forcing him to apply for reduced lunches at the school district with money the state doesn't exactly have, but hey, you are from Wisconsin, so it's all good! You aren't like one of those "others" that have come here and leached off our taxpayers, using our schools, roads, and health services. They've come from Mexico or Belieze or France. They may be doing exactly what you are doing, but you are from Wisconsin, so its all good.

Someone needs to tell Sammy that just moving people to rural Kansas won't solve jack. You need to move jobs to rural Kansas. No one is going to move to Jetmore cause they love the climate and are looking to get involved in the local arts scene.

Katara 7 years, 4 months ago


People move to where the jobs are.

I understand the reasoning behind the carrot dangling but it is such a short-sighted view and one that hurts the community more than helping it.

Paul R Getto 7 years, 4 months ago

An interesting perspective, no doubt. Looks like Washington-speak to me. Muscular Sam seems to have soaked up the culture there. Using the tax code to try and manage people's behavior is an old Washington trick. It's done all the time; one example comes to corporations tax incentives to fire American workers and move their operations overseas. The depopulation of rural America began during Reconsruction after the Civil War. Reversing the trend won't be easy, but we do need to save at least part of rural life so we can eat regularly and don't get turned into the Poppers' famous Buffalo Commons.

yourworstnightmare 7 years, 4 months ago

Again, let the market dictate. If a Buffalo Commons is feasible, it would be a great thing. If we can satisfy our food needs, I say bring it on.

Rural Americans think of themselves as self-sufficient boot strappers. The fact of the matter is, their rural lifestyle is subsidized heavily at the expense of urban tax payers.

Sewers, roads, water, schools, county administration. All of these things could not be supported by rural taxes and industry alone, so they are subsidized for rural people.

Rural welfare mothers make better lovers, though...

cowboy 7 years, 4 months ago

Isn't this remarkably similar to allowing aliens resident tuition ? What a crock of crapola. This is your economic plan Sam ?

Hwy50 7 years, 4 months ago

Up next, tax break for the rural Kansas buggy whip manufacturers. I thought Brownie would be all about letting the free market drive things, not manipulating things with taxes. The free market already spoke, small rural towns are done. It makes no economical sense to keep so many small towns around. I'd like to see numbers that show small towns are a net positive tax source. I doubt it would be found. Farms around them? Yes, they make money. All of the small towns in between your slightly larger Walmart and Dillions towns? Board 'em up. How many farmers honestly spend any money in the small towns except for the local cafe to drink coffee? I could never figure out why so much effort was spent rebuilding Greensburg.

cowboy 7 years, 4 months ago

Sam has relatives moving to kansas !

KEITHMILES05 7 years, 4 months ago

Unless there are quality jobs and social life nobody is going to be moving to the rural areas which desire to be revived. Makes no sense.

notanota 7 years, 4 months ago

So I should build a teeny second home over in rural Kansas for the tax write-off before I buy the McMansion over in JoCo? That's a sweet five years of tax free livin' right there.

yourworstnightmare 7 years, 4 months ago

Talk about social engineering.

This is ridiculous. Let the market decide where jobs and opportunity spring p, and thus population.

This is heavy-handed government social engineering (aka socialism).

yourworstnightmare 7 years, 4 months ago

The government plays a vital role in the management and exploitation of markets, and has done so throughout history and certainly in the history of the USA, resulting in the strongest economy the world has ever seen.

This is a case of the government working against the forces of free markets for no good reason. Let the natural processes redistribute population based on market forces.

Fossick 7 years, 4 months ago

"This is heavy-handed government social engineering (aka socialism)"

Technically, it's Progressivism, but the point is still correct. Conservative social engineering is likely to be just as harmful, and as full of unintended consequences and incentive traps, as is liberal social engineering.

However, if you begin with the assumption that government exists to solve social problems, this is what you get, not only because there are an unlimited number of social problems, but because government has proven itself inept at solving them.

yourworstnightmare 7 years, 4 months ago

Rural Americans think of themselves as self-sufficient boot strappers. The fact of the matter is, their rural lifestyle is subsidized heavily at the expense of urban tax payers.

Sewers, roads, water, schools, county administration. All of these things could not be supported by rural taxes and industry alone, so they are subsidized for rural people.

Rural welfare mothers make better lovers, though...

tecuani 7 years, 4 months ago

What a lame plan.

What the state should be doing is taking these counties that are losing people and force consolidation of the counties. Consolidate all of the county services. Pool resources for better, more efficient services. Four counties could afford better engineering staffs as well as better prosecution and law enforcement entities than one county could.

Kansas has too many counties. I am from SE Kansas and when I drive from there to Lawrence I pass through SIX counties in two hours.

Sammy wants to talk about "difficult choices" or "deep cuts", these are the decisions that would really solve a bunch of the financial problems for both poor counties and the state.

Sam and his cronies are cowards and socialists.


Dan Thalmann 7 years, 4 months ago

I'm shocked by the absolute ignorance displayed by many posters here about rural Kansas... scratch that... I'm not shocked because I lived in Lawrence for several years and know that most Lawrence folks don't know squat about rural Kansas. Please. Educate yourselves by going west of Topeka and getting off I-70 for once in your lives!

yourworstnightmare 7 years, 4 months ago

What I do know about rural Kansas is that it depends upon subsidies to maintain infrastructure that serves relatively few people.

The school districts, water, sewer, roads, and county administrations would not be supported by taxes from the people they serve. They depend upon tax dollars from urban areas to subsidize their rural existences.

M_12 7 years, 4 months ago

So you would have those who reside in rural areas living in unkempt squalor? Your isolationist ideas are small-minded. The domestic oil you worship, the natural gas which warms your home, the bread you eat--that all comes from rural areas. And if you want to get the cow to a market you have to drive it down a road. When you can grow your own wheat, grind it into flour, bake your own bread, drill for your own oil and refine it into gasoline, raise your own cattle and butcher it yourself--THEN you can demonize rural Kansas. Until then, you need rural Kansas, and you should be grateful.

Dan Thalmann 7 years, 4 months ago

Well said, M_12. Let's play a game, nightmare. Let's put up a wall around each of the 25 biggest cities in Kansas. Rural folks can't get into the cities and city folk can't get into the rural areas. Who lives longer? I think you need us more than we need you.

M_12 7 years, 4 months ago

Agriculture subsidies--like most government policies--are in need of regulation. When the subsidy program was first implemented, it was formed to help small farmers earn a decent wage. My grandfather wept the first time he had to plow a portion of his wheatfield under. The money he got for plowing that field under, however, helped him subsist for another year. Now that Big Farm has taken over most of the agriculture industry, the policy needs to be regulated so that small farmers can still benefit, but corporate farm cannot take advantage. But since corporate farm has the money to hire lobbyists, the policy will neither end, nor undergo regulation. The intent behind the policy is still good--the implementation of it is not. We did not eliminate the Dept of Defense because they paid thousands of dollars for toilet seats...

lawslady 7 years, 4 months ago

They're trying to attract people to places where there already are not enough jobs. I'd move to Arkansas (CHEAP real estate) but there aren't any jobs there either.

Meanwhile, here is a bill that would give data business centers complete freedom from paying sales tax - if they expend $ in Kansas. Carrot? Or is some deal already in the works we haven't heard about?

HB 2338 – Amends the sales tax statute to provide for a new exception (gggg), for commercial data centers (the data center business has to make a minimum investment in a physical location in Kansas of $25,000,000 within the first six years of operation in Kansas – so this appears to be a bill designed to attract a specific business). Note: This bill is 35 pages long, and it amends the same statute that is also the subject of HB 2287 (which would add a new gggg subsection - but it would be for a sales tax exception for purchase of school supplies).

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