Costly tax cuts and a sluggish economy aren’t the only budget challenges facing Kansas. Long-term demographic shifts could make it more costly to provide services in rural parts of the state.
To his credit, Gov. Sam Brownback has tried to tackle these challenges – though tax and student loan incentives likely won’t be enough to stop these shifts.
Jeremy Hill, director of the Center for Economic and Business Research at Wichita State University, and Chris Courtwright, principal economist for the Kansas Legislative Research Department, spoke about these challenges at a recent economic policy conference at the University of Kansas.
If current demographic trends continue over the next 50 years, Hill said, 80 percent of the state’s population will be concentrated in a few urban areas, and the rural population could shrink to about 700,000 people, the Lawrence Journal-World reported. That could mean higher costs for delivering health care, education and other services to rural areas.
But that’s not the only challenge. The state’s population is also getting older.
By 2066, Kansas’ retirement population could outnumber its youth, Hill said. That means the cost of government services will be borne by a smaller working-age population.
This shift isn’t because Kansas has a fertility problem. “We’re good at having babies,” Hill said.
Rather, the problem is that too many young people move out of the state after they graduate from high school or college, Hill said. Kansas also isn’t very good at retaining students who come here to attend college.
Economic opportunities are a big reason why many young people leave. But quality of life and social attitudes also are factors.
Even the availability of high-speed internet service can be a factor in whether young people stay or leave, The Eagle reported last week.
Kansas is already seeing some of the effects of those demographic shifts. Courtwright noted that some rural areas struggle to approve school bonds because many of the residents are senior citizens who no longer have kids or grandchildren in the school system.
Brownback recognizes the problem of attracting and retaining people in rural areas. That’s why he and the Legislature approved Rural Opportunity Zones in 77 Kansas counties that offer state income tax waivers for up to five years and student loan repayments of up to $15,000 for qualifying recipients.
Brownback also says the out-migration problem was the key reason he pushed for his tax cuts. Because Kansas doesn’t have beaches and mountains, it needs low income taxes to attract and retain residents, he argues.
However, Courtwright said the current tax policies make it more difficult to deal with these demographic challenges. In addition to the huge loss of revenue from the tax cuts, the state is now more reliant on sales taxes, which, in this internet age, have become a less dependable source of tax revenue.
It will be difficult for Kansas to halt these demographic shifts. But at least state officials are working to slow and prepare for the change.