Brownback program's goal: rural growth

04/12/2011 12:00 AM

04/12/2011 9:27 AM

When Darrick Zerr graduated from Hoxie High School Kansas 1994, the rural town in northwest Kansas had 3,400 people. Today, it's at 1,200.

"Farmers are making money and spending it," said Zerr, a salesman for Hoxie Implement, an agriculture equipment dealership. "We have jobs, but we don't have enough people."

Gov. Sam Brownback is hoping his new economic incentive plan will do something about that — not only in Hoxie, but in rural areas throughout the state that have seen shrinking populations for decades.

By the time the 2020 U.S. Census is conducted, Brownback says he'd like to see rural counties stop their population decline and maybe even grow.

"That's my objective," Brownback said.

In an attempt to make it happen, his administration created a plan that targets 50 rural counties — pegged as rural opportunity zones, or ROZ — with a two-pronged approach for a five-year stretch.

It waives state income taxes for tax years 2012-16 for those who relocate to one of the ROZ counties after having lived outside of the state for at least five years or having had a Kansas-source income of less than $10,000 for at least five years prior to moving.

The second part is aimed at bringing younger people to rural areas. The plan would pay off $3,000 a year in student loans — up to $15,000 — for college graduates who move to one of the targeted counties beginning in 2012. The offer would end in 2016.

The $15,000 would be split between the state and the county, which would have the option of whether to participate. It wouldn't matter whether the graduate's degree was from a Kansas college or outside the state.

In either case, there is no penalty for leaving a ROZ county before five years are up.

Brownback easily pushed the plan through the Legislature in March and recently signed it into law.

Raising awareness is his next step. So on Monday, he held ceremonial signings at four stops around the state.

One of those was at Wichita State University, where the loan-payoff piece was the main topic. He said graduates are sometimes reluctant to move to a rural area because jobs there don't usually pay as high as in urban areas.

"But combine this with student loan paydown," Brownback said, "and they may be able to make it work."

While the state's other economic incentives have targeted moving companies to the state, he said this one is all about moving people to Kansas.

"We're trying something out of the box," Brownback said. "It's about trying to create opportunity for people. Unemployment is very low in rural Kansas.

"This gives our rural areas something to sell."

But will people respond? There's a mixed reaction.

Some say the plan's lures don't address the real reason someone moves to an area. Most officials from ROZ counties were "cautiously optimistic" but taking a wait-and-see approach.

"It's so new we haven't even discussed it yet," Harper County Administrator I.D. Creech II said. "But any time you can put an arrow in your quiver you do it."

Regardless, the state has its work cut out to increase growth in rural areas.

While the state as a whole has seen a steady single-digit percentage growth for decades, including a 6.1 percent increase from 2000 to 2010, the folks are moving to urban areas.

Meanwhile, most of the ROZ counties have seen at least 10 percent population loss over the last decade.

Why people move

Laszlo Kulcsar, director of Kansas Population Center at Kansas State University, said people — particularly college graduates — move to areas for such reasons as good-paying jobs, good schools and a social life.

"When people make a decision about moving, it's very complex," he said. "Frankly, I'm really skeptical about whether (Brownback's plan) will work."

Kulcsar noted that the state's income tax isn't high enough for the tax break to be a significant draw.

"It's much easier to keep people in place than luring people back from some other place," he said. "Those programs that tend to work are those that help small businesses or whatnot to make people think twice about leaving."

Kulcsar said he admired Brownback "for trying to do something."

"But sometimes I wish actual science could precede policymaking," he said.

Students' opinions

Some WSU students saw both sides of the plan having benefits.

"I guess it depends on a what profession you're going into," said Darren Dawdy, a freshman engineering student from Derby. "Engineering is more of an in-town job, so it would be a bad draw for me. Now, for teachers, that would be a good draw."

Tina Thomas, a junior from Salina who is majoring in early childhood education, said it would be a good way to improve the quality of teachers in rural areas.

As for Chandel Dreyer, a junior nursing student from Goddard, she said, "I know in our field it would bring people out to those communities.

"They could survive off having a nurse and not need a doctor. I think it's really good. Plus, it would help pay off tuition, and we're all about that."

Attracting professionals to rural areas is particularly difficult.

Zerr said it took three years for Hoxie, the county seat for Sheridan County, to recently land a doctor. And he came all the way from New York.

"It's hard to get people to come here," said Zerr, who is also a Hoxie city commissioner. "Most of my buddies from high school moved to Kansas City. People think maybe it's too slow here and want other things to do.

"But when people start having kids and want safety, maybe Hoxie isn't so bad after all."

'Something for rural Kansas'

With a population of 7,858, Kingman County is one of the larger ROZ counties. More than 900 residents make the 40-minute commute to Wichita for work.

But it's also a county that needs a boost because it too has been losing population.

"I'm guardedly optimistic this will work," said Jane Wallace, Kingman County's economic development director. "I certainly hope so."

She particularly liked the part about repayment of student loans, but saw the state income tax waiver as a lure for even retired couples.

"We want our kids to come back," Wallace said, "but we'll take whatever we can get."

Considering the large tide of residents leaving rural areas for so long, the new incentives seemingly would have a negligible effect.

"Yeah, it's kind of a spit in the ocean," Wallace said. "But at least it's something. In the past, we've always felt like we were left behind on the incentive packages because we don't have big businesses.

"This is something for rural Kansas. At least it's a gesture that we're important out here."

Luring graduates home

In Harper County, the population is a little more than 6,000 — well below the nearly 10,000 of the 1960s.

"A lot of kids go off to college or want to get out of the rural area into big cities," said Mike Lanie, the county's economic development director. "But after about 10 or 20 years, they're always looking for reasons to return home. We're trying to create opportunities."

Whether the incentives will boost opportunities and draw people to Harper County "depends on how it all plays out," said Creech, the county administrator.

"If it's just something that sounds good and nobody takes advantage of it," he added, "it's not going to do us any good. There are some programs that have a niche and take off. Others, while they may be a really good idea, they just never take off."

Program's costs

The state estimates the cost of the income tax waiver would be $1.5 million in fiscal year 2013 and $4.4million in 2013. The college loan repayment is expected to cost $1.33 million in 2012.

Secretary of Commerce Pat George said he would expect all of the counties to sign up for their half — $7,500 — of the college loan repayment.

He also said the state is encouraging the counties not to just dip into their budgets for the money but also to set up nonprofits to accept donations.

Spreading the word is the state's key step.

Brownback is all for putting up billboards from New Jersey to Southern California proclaiming Kansas' rural lifestyle.

"Let's put up... 'Come to Kansas, no state income taxes for five years, better quality of life,' " he said.

Counties such as Harper and Kingman — because they are short commutes to Wichita — have an advantage of attracting new residents over other ROZ counties in far western and northern Kansas.

"Really, it's all about changing the way people think about us," said Kingman County's Wallace. "When they come to realize it's easy living, quiet living out there, they'll want to join us."

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