Kansas Lawmakers Debate Rural Economic Development


By John Celock

A Kansas legislative committee heard competing visions for how to increase economic development in the state’s rural areas.

The House Appropriations Committee Monday heard testimony on legislation that would fund the state’s rural opportunity zone program and a bill that would allow for counties to opt out of the ROZ program and into a recreated Kansas Enterprise Zone program. ROZ supporters described the program as bringing people – including millennials – to rural areas, while opponents said that the program has supported those who were planning to go to rural areas and did not provide jobs. Opponents said that additional economic development tools were needed for rural areas.

“This is working, this is driving growth in our community,” Kearny County Hospital CEO Benjamin Anderson said about ROZ. “I drove seven hours to tell you that. It is good policy and it is fueling growth.”

The ROZ program was created by Gov. Sam Brownback (R) and lawmakers in 2013 and allows for the 77 designated ROZ counties to offer student loan repayments and tax credits for residents who relocate to the county. Under the program, counties need to match the state’s contribution in order to offer the loan repayment. Several counties spoke of having waiting lists for the loan repayment.

Anderson said that in Kearny County, he has been able to use ROZ to recruit new staff for the hospital and it has brought in 28 people since the county entered the program. He said the county has lost three people in the ROZ programs, teachers who chose to go to other school districts due to wanting to teach subjects not offered in the Kearny County schools.

Anderson said that the ROZ program has been helpful in bringing a new population to rural counties.

“Rural Kansas desperately needs millennials and this program recruits millennials,” Anderson said.

Greeley County Community Development Director Christy Hopkins told lawmakers that the program has been helpful to her county’s economic growth. She said that the county currently has 5.7 percent population growth and more young families have been coming to the county. She said that ROZ is part of a larger effort that has brought people, particularly young families, to Greeley County, and said it should remain part of her toolkit.

Hopkins also said that combining local and county governments, renovating schools and investing in downtown business districts helped to spur Greeley County’s growth.

Scott County Economic Development Director Katie Eisenhour told the committee that her county has seen ROZ as a way to bring people to the county. She said her county has jobs available and it is looking for people to come back to the county to fill them. She said the incentives offered by ROZ allow for people to come back.

Appropriations Committee Chairman Troy Waymaster (R-Russell) took issue with Eisenhour’s description, saying that part of the issue is the type of jobs that are available in rural areas. He said that he wanted to move back to Russell from Kansas City but that it took three years for him to find a job that matched his background in the financial services sector.

“One of the delays in moving back was not finding the job that fit my criteria in terms of my job specifications,” Waymaster said. “You mention there is a plethora of jobs. In a way I kind of question that. We don’t have the jobs out in western KS that we do in the other areas of the state. We need job creation efforts in central and western and rural parts of the state. There may be jobs out there but they are not going to acquire the job base that we want to see move back into rural Kansas. It took me three years to find something to move back to rural KS. I would question the idea that the jobs are there.”

Waymaster said that he knows of other high school classmates of his who are in the Kansas City metropolitan area who would like to move back to Russell County and have trouble finding jobs that match their skill sets.

Eisenhour told Waymaster that the jobs that she was referencing in Scott County and other rural areas cover a wide variety of business sectors and skill sets.

“We have 30-45 jobs advertised every week. Some good, some fast food. We are short people,” she said. “Our John Deere dealer cannot get enough technicians.”

Eisenhour also said that the other thing she has been seeing is people in white-collar jobs relocating to rural areas and being able to telecommute to their jobs. She said the ROZ program has allowed for people to take advantage of this option.

Rep. Sydney Carlin (D-Manhattan) said that she has seen that in her community.

“It tickles me a lot that they brought their trade with them,” she said. “That is were you see the opportunity for others to work and gain from them being there.”

Carlin noted that she has been having conversations recently with a couple of physical therapy students in New York State who want to relocate to a rural area. She was told by those testifying that Greely County was looking for physical therapists and ROZ could help lure people from New York to Kansas.

State Commerce Department communications director Nicole Randall told the committee that the ROZ program has worked for the state. She noted that Commerce Department statistics show that there is a six-dollar return on investment for every dollar invested in ROZ. She also said that other states and countries are studying ROZ as a rural economic development policy, noting that a South Korean television station recently did a segment on the program.

Rep. J.R. Claeys (R-Salina) questioned Randall’s statistics, saying that with residents receiving the ROZ credits and loan repayments after they take an existing job the return on investment comes without the state or county investing any money in the program.

“It seems to defy logic to say I put a dollar in and getting a six dollar return and then I get a return without putting a dollar in,” Claeys said.

Randall said that the ROZ program is retaining residents in Kansas, in particular the millennial population, who she said is likely to leave the state or not return to a rural area. Randall said that she would be willing to provide lawmakers with more data on the ROZ program based on what the committee was asking about.

Anderson had also said that the ROZ program was needed as an incentive to get people to stay in rural Kansas after they move into the state. He said that it takes several years for newcomers to feel comfortable in rural communities and the ROZ incentives help provide a bridge between their initial move and a feeling of comfort and welcome.

Smokey Hill Development Corporation Executive Director Rob Fillion told the committee that he did not believe ROZ to be an economic development tool, but rather one that helps develop the local community. He said that in his experience the program helps after jobs are created but does not directly create jobs. Fillion said he favors the legislation that would bring back the enterprise zone program and allow counties to opt into either ROZ or enterprise zones.

Under the enterprise zone program, tax credits would be given to businesses to relocate or start operations in rural areas of the state.

“Let me be honest with you. I feel this is not a true economic development tool. This is a community building tool,” Fillion said of ROZ. “It is not an economic development tool. It is not driving jobs. This is a pass through program.”

Fillion said that the enterprise zones would appeal to millennials since he said millennials want to be entrepreneurs.

Fillion said that since the enterprise zones were eliminated he believes his ability to recruit and retain business to Ellsworth County has decreased.

“They’ve decreased drastically,” he said. “Our ability to attract business or expand or keep their doors open have decreased significally.”

Fillion found himself questioned by lawmakers who asked about the potential cost of the enterprise zone bill and if it would be a true job creation measure. Carlin said that she knew that jobs were out there and that the question is bringing in residents to do the jobs. She also wanted to know the overall cost.

Fillion said that the overall cost of enterprise zones was hard to quantify since the program would likely create jobs which would bring in additional revenue to offset expenditures from the tax credits. Fillion also said that several of the ROZ incentives in the area of student loan repayments are already done by local businesses.

Carlin said she would like see some sort of hybrid model that allowed counties to use both ROZ and enterprise zones, noting that New York State has a hybrid in place for counties. Rep. Jim Kelly (R-Independence) echoed Carlin, noting that counties should be able to use multiple programs.

Rep. Susan Concannon (R-Beloit) disagreed with Fillion, saying that job creation does not come strictly from incentives but from a holistic approach.

“Without having a good education system we cannot bring jobs in,” she said. “Without a good health care system we cannot bring jobs in. It is both. They work and they intertwine. It is a quality of life issue. You need to look a little bigger picture than bringing jobs in.”