Advertisement

Archive for Monday, July 18, 2011

Kansas counties wary of rural tax incentives

July 18, 2011

Advertisement

— A new program to help rural Kansas counties attract residents is gaining interest, but some county officials are hesitant to participate in all the program's provisions.

The Kansas City Star reports Monday that counties qualifying as rural opportunity zones are interested in the income tax provisions of the program. However, some county officials are unsure if they will partner with the state to forgive student loans. Officials say they are worried the state's money will dry up in the future, like it has with other programs.

The program targets rural counties that have seen significant declines in population during the last decade, some by more than 20 percent. Gov. Sam Brownback touted the program as a way to lure new residents and small business to revive the counties.

"This is a risk-free opportunity for us to draw attention to parts of our state that are losing population and offer another incentive to get people to move to Kansas," said the governor's spokeswoman, Sherriene Jones-Sontag.

Since July 1, 24 applications have been submitted for the program and 23 of 50 eligible counties have agreed to participate in the loan program. Counties are contributing between $3,000 and $26,000 to the program, with the state chiming in with $1.3 million. Up to 20 percent of a student loan can be repaid each year.

Washington County officials aren't sure they want to make the commitment and want to see how the program does first. County Commissioner Gene Helms said there were better uses for tax dollars than repaying student loans.

"I think they can pay for it themselves if they're making a living on their own," Helms said.

Christy L'Ecuyer, Washington County's business coordinator, said another approach might be to offer incentives for middle-income housing. She said the county has a lot of jobs and an unemployment rate of 4.2 percent. What it lacks is rental and affordable housing.

She said potential workers often earn too much to qualify for housing credits and can't afford high-end housing that's available.

In Republic County, Commissioner Frank Rytych said the county isn't against the program, just that there are too many unknowns.

"It's unproven," he said. "We don't know that it's going to pan out OK. We don't want to get caught holding the bag."

Brownback's administration said neither the county nor the state has to continue paying tuition benefits if the five-year program is halted.

Revenue Secretary Nick Jordan said the program was Kansas' attempt to lure new residents who are attracted to low or no income taxes, pointing to the growth in Texas, Florida and South Dakota where there is no income tax.

"I don't know if we're going to see a tremendous swell of people coming back to Kansas on the program, but I think it will help start changing some of the economic situations in these rural communities," Jordan said.

Kansans pay on average about $1,800 per year in income taxes.

Experts said the Kansas program was innovative, but doubt it can reverse a population trend affecting not only Kansas but the Midwest.

"On the face of it, I would say you're better off making tax breaks for companies to move somewhere to create jobs," said William Frey, a demographer at the Brookings Institution.

"There's not much of a downside if people aren't going there anyway," Frey said. "But to me, it's employment that tends to attract people."

Ralph Goodnight, director for community development in Kearny County, said the western Kansas area could benefit from the program, especially if a new power plant proposed by Sunflower Electric Power Corp. near Holcomb is constructed. Kearny's population fell 12 percent over the decade.

"We do feel we have an opportunity to grow, but that hinges on other things happening," said Ralph Goodnight, the county's director for community development.

Still, Goodnight is pleased policymakers in Topeka are trying something to stop the declines.

"This is the first administration in some time that has proposed a program that actually benefits rural counties in Kansas," Goodnight said.

Comments

Use the comment form below to begin a discussion about this content.

Commenting has been disabled for this item.