LINCOLN (AP) — A Kansas program that offers tax breaks and college-loan payments to people who move to rural parts of the state could be on its way to Nebraska.
State Sen. Galen Hadley of Kearney said a legislative panel will consider the program as a way to address population losses to urban areas. Hadley said an official from the Kansas Department of Commerce was scheduled to testify about the program, which targets 50 counties as “rural opportunity zones.”
The Legislature’s Revenue Committee will hear public input on the idea at a hearing today in Kearney.
“If we don’t do something, there’s just going to be this continual movement east,” Hadley said Wednesday. “Agriculture is still our biggest economic driver, and we’ve got to make sure we can do something to help our farmers and ranchers.”
The program waives state income taxes — roughly $1,800 annually for the average taxpayer — for up to five years if a person moves to one of the rural counties from out-of-state. Residents must not have lived in Kansas within the last five years or earned more than $10,000 from an in-state source, and the program sunsets in 2017.
The student loan forgiveness program will pay up to $3,000 annually for up to five years for college graduates who move to one of the counties. The loan program applies to Kansas and out-of-state residents, but counties must agree to participate and share part of the cost.
Population experts have said the Kansas program is innovative, but question whether it can reverse a trend affecting much of the Midwest. Some demographers have said the tax breaks are better suited for companies to create jobs that will attract newcomers. And some Kansas counties have said the program has not yet proven its worth.
One group that has pushed for rural development strongly supports the idea and will ask lawmakers to act.
“We think it’s a good idea,” said Tom Jordison, executive director of Nebraska Renaissance, a group that seeks to revive the state’s rural economy. “We have the opportunity to really address population decreases head-on here — to look at ways to incentivize people to move back to rural Nebraska.”
Jordison said expanding computer technology gives potential employees an opportunity to work from home, without the traditional brick-and-mortar offices in urban settings.
“People do make decisions based on their economic well-being,” said David Drozd, research coordinator at the University of Nebraska Omaha’s Center for Public Research Affairs.
Drozd said Nebraska has lost more residents to Wyoming and South Dakota, which don’t impose income taxes, than the state has gained in each of the last 10 years. Drozd said other states, like Iowa, have created programs that encourage native residents to return home. Local governments in North Dakota have offered free land to attract people, he said, but the incentive sometimes created culture clashes when people from different parts of the country arrived.