Curbing exodus of graduates - The Providence Journal

The exodus of college graduates from New England to jobs in other parts of the country saps the region of the young, creative minds that are needed to build a competitive, knowledge-based economy.

The out-migration affects all the region’s states, but it is especially pronounced in Rhode Island. The loss of talented students after graduation has left behind a static population and a pool of older workers without the skills to encourage companies to relocate or expand here.

The “brain drain,” first identified years ago, has been blamed on the state’s high cost of living, especially for housing, a culture of insiders that doesn’t welcome newcomers, poor links between employers and the schools and the lack of economic opportunities.

The issue comes up regularly at meetings of business groups and at the State House. But nobody has come up with an answer in Rhode Island.

This year, while state legislative leaders and Governor Carcieri spent their time mired in a fight over spending priorities and plugging holes in the budget, their counterparts in Maine looked forward to come up with a plan to curb the brain drain from their state.

Their experiment, considered the first of its kind in the nation, attacks two problems: the high cost of a college education that leaves a student with an average of $22,300 in debt and the out-migration of graduates.

It works this way:

Any resident who earns an associate or bachelor’s degree in Maine and then lives, works and pays taxes in the state is eligible for a maximum tax credit of $2,100 per year, or a total of $8,400 for the four years of schooling.

And there’s this twist:

The new law that takes effect in January allows employers to make the loan payments for graduates they employ and claim the tax credit.

The idea is to keep Maine graduates in Maine by offering a financial incentive to help them pay down their student loans; and to encourage employers to reach out and hire Maine graduates.

“This is a wise investment in our children’s future and our state’s economic future,” said Maine Gov. John Baldacci.

There’s a taxpayers’ cost to all this.

By one estimate, the tax credits will cost the state’s 1.3 million residents an estimated $150,000 during the next two years. Within 10 years, the cost could grow to $62 million.

That price tag may take aback Rhode Islanders, who are already paying among the highest taxes in the country for a government, even with its heavy tax collections, that can’t pay its bills.

But proponents of the tax credit in Maine argue that keeping the state’s human capital from fleeing will help the creation and expansion of taxpaying businesses, as well as create a new pool of taxpayers. They have a study that shows that by 2018, the state will actually have a net gain, after the tax credits are included, of $15 million.

Here’s something else to consider:

The tax credit idea in Maine was not developed and pushed by the insiders — the lobbyists, college administrators, or business special interests.

Rather, it came from the bottom up, from a grass-roots organization of students and community leaders called Opportunity Maine, that put together some compelling statistics that showed that more than 50 percent of the nearly 7,000 students who earn an associate’s or bachelor’s degree in Maine leave the state for extended periods.

“We’re trying to combat the high cost of student education and student loans,” said Andrew Bossie, president of Opportunity Maine.

“On top of that, we’re trying to address the economic problems of the state. We have lower income and fewer degree holders than any other New England state.”

Opportunity Maine joined with the League of Young Voters to collect 73,000 signatures to put their proposal to a referendum in November. But that was forestalled when the legislature overwhelmingly passed a bill, the governor signed it, and the tax credit was created.

Bossie and other advocates admit the tax credit is an experiment, and it’s unclear how well it will work or how much it will cost.

But the point is that Mainers are trying to solve what everyone agrees is a problem.

They are tired of seeing the best and brightest of their students drift away. They’re tired of seeing a stagnant economy fall further behind other regions of the country. They’re tired of waiting for business and political leaders to do something.

There’s a lesson there for Rhode Islanders.

Writtten by John Kostrzewa, business editor, jkostrze@projo.com