From Kansas Agland:
TOPEKA ? Kansas’ rural-urban divide shows no signs of abating, economists and advocates said this past week — drawing attention to the economic stress placed on the state’s least-populated areas.
Presenters provided a flurry of data and statistics at the Kansas Economic Policy Conference at the University of Kansas that underscore the continuing gap between urban and rural, and especially between northeast Kansas and the rest of the state.
Lawrence and the Kansas City metropolitan region have enjoyed most of the economic growth in the state since 2012, said Kenneth Kriz, director of the Kansas Public Finance Center at Wichita State University.
“Wichita and the balance of the state have basically been flat. They’re hardly growing at all. So growth has really been concentrated in the northeast part of the state and hasn’t diffused out to the rest of the state,” Kriz said.
Kriz pointed to a chart from the U.S. Bureau of Labor Statistics that showed Lawrence and Kansas City surging ahead on nonfarm payroll growth. Meanwhile, Wichita, Topeka and the rest of the state have grown far more modestly and at about the same pace.
Gov. Sam Brownback’s administration has often highlighted the success of the Kansas City metro area, and the performance of the Kansas side of the border. Brownback has previously touted the higher wages paid on the Kansas side.
“January 2011 — wage differential is 40 cents an hour in favor of the Kansas side. Now it’s $2.93 cents an hour in favor of the Kansas side. So when you get job growth, you get labor competition, you approach full employment, what do you do? You’ve got to bid up the price, you’ve got to bid it up to get people,” Brownback said earlier this year.
Sen. Jim Denning, R-Overland Park, said people can tell there’s a divide between the populated and less-populated areas of the state. He suggested the state’s policy approach toward rural areas needs to change.
Denning singled out the Rural Opportunity Zones program. The ROZ program spans dozens of counties, covering wide swaths of western and southeastern Kansas. It is designed to pull individuals into the state’s rural areas.
ROZ provides two incentives in an effort to lure individuals to rural areas: student loan forgiveness and income tax waivers. Individuals who move to a participating county are potentially eligible for loan repayment, while those who have never lived in Kansas or have lived out of state for several years can waive income taxes for up to five years.
Denning said the numbers for the program aren’t good. He said the program isn’t growing population.
“It’s doing very little, in the real life. It only brings in two humans per county per year,” Denning said.
He added: “Politically, it’s a 10. Reality, it’s a one.”
The Kansas Department of Commerce told lawmakers this spring that of the original 50 counties in ROZ when the program began in 2011, 35 have seen improvements in their average population since then when compared to their average population over the previous 40 years.
“Yes, the Governor remains committed to the ROZ program. The program currently is funded with $1,752,475 (appropriations) in FY 2016 and $1,749,879 in FY 2017,” Brownback spokeswoman Eileen Hawley said in a statement.
Lawmakers will likely discuss the ROZ program when they reconvene in January, as they search for potential savings as the state’s revenue collections continue to fall behind estimates. The program was already the subject of scrutiny during the 2015 session.
However, if the next Consensus Revenue Estimate — to be issued in November — predicts less revenue for the state, either Brownback or lawmakers will likely have to cut spending, raise taxes, or transfer money from other state funds to keep the state’s budget balanced.
Brownback has said he isn’t looking at either spending cuts or tax increases. But others are skeptical that will be possible.
“With the governor not accepting reality that his tax plan has not generated the new jobs and new tax revenues, actual revenues falling below estimates and increased expenses on the horizon, they’re going to have to be significant adjustments made,” Rep. John Carmichael, D-Wichita, said.
