In an effort to attract college graduates to rural areas of Kansas, the Senate passed legislation proposed by Gov. Sam Brownback to provide tax exemptions and set up a student-loan repayment program for some who relocate to those areas.
Senate Bill 198 designates 50 counties as Rural Opportunity Zones (ROZ) that need professionals and college graduates to provide services in their communities, particularly in medical and dental fields.
Most of the ROZ’s have experienced population declines of at least 10 percent.
Governor Brownback and the secretaries of revenue and commerce requested this bill to bolster the rural areas. In presenting the program to the Senate Taxation Committee, Revenue Secretary Nick Jordan said the administration is attempting to reverse the migration from rural to urban communities.
"This is a very innovative and new idea on how we might repopulate and bring people back to rural Kansas," Jordan told the committee.
Taxpayers who relocate to an ROZ before Jan. 1, 2012 would receive a full tax credit against their own state income tax liability for the tax years 2012 to 2016, provided they lived outside the state for five or more years prior to moving to the ROZ, had Kansas source income of less than $10,000 for each of the previous five years, and maintained their residency during the entirety of the taxable year for which the credit is to be claimed.
The student loan repayment aspect of the bill would require counties to pay half of student loans, in equal increments over a five-year period, up to a maximum of $15,000. A state-matching program could provide for matching payments, calling for the state to pay up to $7,500 of the $15,000 total.
Due to the tax credit program's limit on income in prior years, it naturally targets college students. The original bill was crafted to attract out-of-state students, but it was amended to include those graduating from colleges in Kansas.
Sen. Ruth Teichman, R-Stafford, is one legislator from an ROZ who is looking forward to the program attracting talent to her district.
"We've got several programs designed to attract people into our districts, be they young graduates or older people who have expertise in how to grow these counties," Teichman said.
Proponents of SB 198 included the Kansas Dental Association and the Kansas Hospital Association. Teichman said one of the goals of the bill, as well as of other programs in place in Kansas, is to "get doctors and dentists back into rural areas."
"Of course our hope is that once a doctor or dentist lives in a community for a few years and makes friends and gets rooted, they'll be more likely to stay in that community," Teichman said.