November 2014 Brief: Volume 21, Number 31
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Suggestions for Reversing Rural Population Loss
by Deborah D. Thornton
Iowa, like many other rural states, is having a problem with population loss. The most obvious evidence of this is our loss of another Congressional seat following the 2010 national census. The “HomeBase Iowa” initiative designed by Governor Branstad was crafted to try to help this by making Iowa more attractive to U.S. military veterans.
As of 2013 there were 63 counties in Iowa with populations between 5,000 and 20,000. Another 25 had populations of 20,001 – 65,000. Only ten were above 65,000. Adams County in southwestern Iowa had the great distinction of having only 3,894 residents, the lowest population of all 99 counties. At the same time our population has been decreasing it has also become more “urban.” As a result, rural counties are having a difficult time attracting residents and keeping their schools filled.
The State Data Center of Iowa (iowadatacenter.org) contains a wealth of information about us and our neighbors which can be used to help craft solutions to population loss. For example, there is a detailed, county-by-county report on in-migration. It reveals that while the majority of in-migration between counties is current residents moving within the state, a large number of new Iowa residents are from outside the U.S. Over 3,100 people from Asia moved to Iowa in the last year. Presumably many of these are students. Another 1,100 or more, came from Central America.
Americans who moved here mostly came from the neighboring states of Illinois, Minnesota, Wisconsin, Missouri, and Nebraska, but a large number came from both California and Texas (over 1,700 each). Colorado, Georgia, Indiana, and Kansas each sent at least another 1,000 people to the Hawkeye state.
The HomeBase Iowa initiative, providing specialized services to help U.S. veterans find jobs and move here, is a good first step. Veterans have a wide variety of skill sets and have certainly demonstrated that they are good citizens – people we want to be our neighbors.
Several states and municipalities which have similar problems with attracting and retaining residents have developed other innovative solutions. Most common are student loan forgiveness programs, such as the one being offered in Kansas. In return for “homesteading” in one of 73 Rural Opportunity Zone (ROZ) counties in Kansas, state and county governments pay off $3,000 a year, for five years, in student loan debt. If someone stays at least five years, they can have $15,000 in student loans paid off, irrespective of what industry they work in. The company the person works for can also contribute $2,500/year to the state program on their behalf, as part of an employment package.
Seven of every ten students graduating from college in the U.S. today have student loan debt, averaging just over $29,400 per person. Having over 50 percent of it paid off simply by choosing to live in a rural county is a pretty good deal. The Kansas Department of Commerce received almost 500 applications in Fiscal Year 2013, up from 390 in Fiscal Year 2012, the first year of the program, which is targeting counties that have lost at least 10 percent of their population since 2000. Any graduate of either a two- or four-year degree program is eligible, whether they attended college in Kansas or elsewhere. The initial amount of tax money dedicated to this program was one million dollars.
As one graduate of Fort Hays State University who took the opportunity to move home said, “To know that I will be able to have my loans paid off within five years is even better than just finding a job. If I do choose to get married … I won’t have this hanging over my head.”
Additionally, Kansas is offering five years of income tax waivers specifically targeted to people who move into Kansas from other states when they move to one of the ROZ counties. People from 44 different states have moved to Kansas and applied for this benefit.
The 71 percent of young people who graduate from college in Iowa with student loan debt ($29,456 average) is the sixth highest in the nation, after Delaware, New Hampshire, Pennsylvania, Minnesota, and Rhode Island. Since much in-state migration is occurring already, encouraging that movement to be to rural counties, instead of to Polk, Johnson, Scott, and Linn Counties, could be useful to both the student and to our rural areas. It would help with K-12 overcrowding in our urban school districts and support rural property sales and the tax base.
Additionally, it’s nice that the University of Iowa is now working hard to attract in-state students to their institution, but if these students are graduating with almost $30,000 in debt each, they’re not going to be able to get married, buy a home, and start new families anytime soon.
The Iowa Legislature, working with a projected state budget of over $7 billion and a budget surplus of at least half a billion, needs to look at further tax cuts for all Iowans, such as the commercial property tax reduction and increased Earned Income Tax Credit. But they should especially consider targeted initiatives designed to keep our children and young families in Iowa, and bring those home who have left – both soldiers and civilians alike.
Deborah D. Thornton is a Research Analyst with Public Interest Institute, Mount Pleasant, Iowa. Contact her at Public.Interest.Institute@LimitedGovernment.org.
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