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Kansas bill offers incentives to attract more businesses to job-scarce rural areas of state

by Laura Tomaka ~ February 2017 ~ Stateline Midwest »
Seven years ago, Kansas lawmakers adopted new incentives for individuals to move to the state and make one of its 77 rural counties their new home. The Rural Opportunity Zones program offers a mix of income tax waivers (for up to five years) and student-loan repayments of $15,000. But as much as he supports the idea, Kansas Rep. Troy Waymaster says another part of the economic challenges for rural areas must somehow be met.
“The problem is when there is no job for them to take, [people] probably are not going to move [to the rural counties],” he notes. “This is the other half of the equation: how you get jobs to move back.”
This year, he introduced the Ad Astra Rural Jobs Act (HB 2168), which would provide tax credits to investors who help businesses expand, locate or relocate in Kansas’ rural areas, many of which are struggling due to trends in their two dominant industries: agriculture and oil. In both sectors, commodity prices are low.
“When [rural areas’] dominant economic engines are in an economic downturn, it really has a catastrophic effect for the entire city or region,” says Waymaster, whose home county of Russell has a population of less than 7,000. “You don’t have farmers having excess cash where they can go out and buy new equipment and new machinery,” he adds, “and on the oil side, you’re not seeing the drilling that was going on [earlier in the decade].”
HB 2168 targets growth in areas that have populations of fewer than 60,000 people and are located outside a highly populated metropolitan region; it also would focus on providing capital for certain types of industries — manufacturing, plant sciences, technology and agricultural technology businesses. The proposal, Waymaster says, is modeled after a bill introduced last year in Missouri.
The growth — or lack of it — of the rural economies of Kansas, Missouri and eight other states is the focus of a monthly study done by Creighton University. In January, for the 17th straight month, Creighton economists found relatively weak economic conditions in the 10-state region’s rural communities (see table). The “Rural Mainstreet Index” is based on a survey of bank CEOs, who point to low agricultural commodity prices and soaring loan defaults as among the biggest threats to the economic health of rural areas. The index also considers factors such as farmland prices, banking and loan activity, hiring, and home and retail sales.
 “The rural parts of America are pretty much forgotten about, and this is why this [legislation] intrigued me so much,” Waymaster says. “It is truly a focus on rural America and looking at businesses that do want to be there.”

Article written by Laura Tomaka, CSG Midwest staff liaison for the Midwestern Legislative Conference Economic Development Committee.