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

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Maine governor breaks new ground with student tax credits

The state of Maine has raised the bar when it comes to college tax credits. Governor John Baldacci has announced a new program to provide tax credits to cover educational loan payments for any Maine resident who earns an associate or bachelor's degree at a Maine state college or university and then continues to live and work in the state.

The program, called Opportunity Maine, is being compared to the federal GI Bill, part of Franklin Roosevelt's New Deal legislation that provided education assistance for veterans returning from war.

The Opportunity Maine Web site describes the program as an opportunity to make higher education more affordable and to create jobs for Maine residents.

The Maine program provides a maximum annual tax credit of $2,100 per year or $8,400 for a graduate who completes four years at a Maine college. Alternatively, a Maine employer can agree to hire a graduate and take over the student loan payments and then take the credit himself.

The Opportunity Maine program is effective starting with the fall semester of 2007. Maine residents who are already enrolled in an associate or a bachelor's degree program at an accredited Maine junior college, college or university may participate.

Maine's new program is believed to be the nation's most far-reaching, according to Tony Giampetruzzi, Opportunity Maine spokesman.

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Governor signs pioneering tax credit law to stop ’brain drain’

NOTE: This article, written by, Glenn Adams appeared in the Bangor Daily News, Boston Globe, Boston Herald, Portland Press Herald, and Portsmouth Herald.

AUGUSTA (AP) - With applause filling his office, Gov. John Baldacci signed on Monday what's described as the nation's most far-reaching law to keep the state's best and brightest from fleeing after graduation by offering tax credits to reimburse their college loans.

"The eyes of the nation are looking at Maine," said Justin Alfond of the League of Young Voters, which helped push the Opportunity Maine bill that was enacted with a historical flourish before the legislative session closed in late June.

The law, described as Maine's version of the GI bill that was signed by President Franklin D. Roosevelt 63 years ago, attempts to end a "brain drain" of Maine college graduates to other states in search of better pay to meet the demands of their college loans among other expenses.

It provides tax credits to reimburse educational loan payments for any Maine resident who earns an associate degree or a bachelor's degree in a state college or university and then lives, works and pays taxes in Maine after earning that degree.

Opportunity Maine offers an option allowing a Maine company that hires a Maine college graduate to take the credit if it assumes the former student's loan debt.

While other states have similar proposals and programs that target people in specific careers such as teaching, Maine's new program is believed to be the nation's most far-reaching, said Tony Giampetruzzi, Opportunity Maine spokesman.

Before it was unanimously approved by the Maine House on June 19, the Legislature's lone World War II veteran, Kittery Democratic Rep. Walter Wheeler, compared Opportunity Maine to the GI Bill of Rights as he made a pitch for passage.

The GI bill, or Servicemen's Readjustment Act, was signed into law by FDR on June 22, 1944, and provided payments for school tuition, fees, books, supplies and subsistence allowances.

Maine's benefits can be claimed only while a recipient lives and works in the state. Tax credits would have a maximum of $2,100 per year or $8,400 total for a graduate who spent all four years in a Maine college.

Baldacci acknowledged Monday that the law will require a major commitment by future legislatures if the program, which has a two-year startup cost of more than $150,000, is to remain funded.

"I can tell you I am personally committed to this," said Baldacci, a Democrat who was re-elected to a four-year term in 2006.

"I often wanted the ability to be able to do this, but we have struggled financially over the years," said Baldacci, adding, "We finally have been able to get to a point where we can get our head above the water and make investments in higher education."

A coalition that launched a citizens' initiative drive last year collected thousands more voters' signatures than they needed to force a referendum. Recognizing popular support for the plan, the Legislature opted to enact the proposal themselves instead - something that had been done only five times previously.

"This is a huge deal for our state," said Democratic Rep. Hannah Pingree, majority leader in the House, which approved the bill 142-0.

Hours after Baldacci signed the state bill, U.S. Rep. Tom Allen, D-Maine, held a news conference to trumpet similar federal legislation he has introduced to create Lifelong Learning Accounts.

Employees would contribute after-tax money to savings accounts that would be employer-matched and portable. Employees would get tax credits on the first $500 they contribute to the account, and a tax deduction on subsequent savings.

There would be no tax penalty for funds withdrawn for educational costs, Allen said.

Americans need such a program to keep their skills sharp amid the rapid pace of technological innovation and increasing international trade that changes jobs, Allen said.

"There is a real need in our work force for continuing education," said Allen.

A Senate version of the bill has been introduced by Sens. Maria Cantwell, D-Wash., and Olympia Snowe, R-Maine.

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Law Signed for Student Tax Credit

by Victoria Wallack

Gov. John Baldacci signed into law Monday what’s being called a first-in-the-nation student tax credit program to help Maine college graduates pay off their loans – a proposal with a $62-million price tag 10 years out that proponents say will be offset by more educated young people working and paying taxes in Maine.

The proposal was brought to the Legislature by the group Opportunity Maine and the League of Young Voters, which collected 73,000 signatures to put it on the statewide ballot. Instead of waiting for the referendum vote in November, legislators overwhelmingly decided to adopt the plan themselves.

In fact, there were only eight legislators in the entire State House – all Republican senators – who voted against the bill, saying the tax break was too broadly worded.

“This is a wise investment in our children’s future and our state’s economic future, and I believe it will pay huge dividends,” Baldacci said at an enthusiastic bill-signing ceremony punctuated with applause.

“This will require a lot of commitment on our part into the future,” the governor said. “I am very much committed to this.”

The new law allows any Maine resident, who earns a college degree at a Maine school, to take up to $1500 off their income taxes for loans taken out for an associate degree and $5500 for a bachelor’s. Opportunity Maine estimates the average tax credit, however, will be between $1,000 to $2,000. The credit caps were determined based on the cost of going to the University of Maine System or the Maine Community College System, but students attending private in-state colleges would be eligible.

Graduates must continue to live and work in Maine to get the credit.

While the state’s fiscal office has estimated the program will cost $62 million in lost income tax revenue by 2017, proponents say the higher wages earned and taxes paid by college graduates would offset that loss. They say the program should break even by 2015.

Majority Leader Rep. Hannah Pingree, D-North Haven, a strong proponent of the tax credit, said the price tag is large, but the cost of doing nothing is even greater.

“If we don’t find a way to keep young people in Maine and paying taxes, we’re in trouble,” she said, referring to Maine’s status as the oldest state in the nation in terms of median age.

Pingree said the Legislature should keep tabs on the tax credit to make sure it’s working, but she doubted it would be amended dramatically.

“The Legislature, in passing this, made a commitment,” she said. “If we get 5000 people enrolled, it’s going to be hard to take away this credit.”

Pingree, in fact, would like to expand the program to Maine students who attend out-of-state colleges and come back to live and work in Maine.

Sen. Richard Rosen, R-Hancock, the assistant minority leader, was one of the eight Republican senators to vote against the bill. He thinks the law needs to be fine-tuned.

“Of course I support the goal of helping Maine students over the burden of their tuition debt and encouraging them to stay in Maine. I voted against the proposal because, as currently written, it was extremely broad and open-ended, and I thought it should have been more focused and affordable,” Rosen said.

“It will be the subject of amendment,” he added.

Members of Opportunity Maine know an amendment is possible since the Legislature can alter any law it passes, but on Monday they committed to making the program work.

“What we’re witnessing is the first in the nation,” said Justin Alfond, director of the Maine League of Young Voters. “An entire generation is now gong to see what this can do.”

Alfond said it was up to supporters to “keep pushing harder than ever to make sure this succeeds.”

(State House News Service)

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Taking Chances

by Justin Ellis

When it comes down to it, college is not for everyone. Some people would rather get right to making money, others see vocational schools as the best way to get bankable skills.

But with rising tuition costs and student loan rates, there are now also a group of people out there who see college as a goal, but can’t get there because of the money question.

Opportunity Maine won’t provide a gold-bricked path to college for everyone, but it will help.

The new law will provide tax credits (or "tax breaks" depending on how you feel about it) of up to $2,100 a year for students who continue to live and work in Maine following graduation.

Every one of the Opportunity Maine people I spoke to said they were almost caught off guard by the Legislature’s approval of the tax credit.

But as far as surprises go, this one was not so bad. Also, its possible this is a first-in-the-country type of program, so we’ll see if the “so goes Maine,” idea holds up.

Opportunity Maine’s organizers had been planning to take this one to the streets, just like every other citizen-initiated proposal over the last few years.

But they still plan to take their show on the road this fall to educate people about the new law and make people aware of how to take advantage of it. That means heading out to schools, talking with guidance councilors, principals, students and parents.

Speaking with Gov. John Baldacci last week, I was told that the tax credit is an important tool for keeping young people in the state.

As the governor sees it, addressing the cost and accessibility of higher education are just as important as dealing with rising property taxes. In the end, taking part in the program means joining the workforce as a young Mainer, which also means becoming another taxpayer, he said.

Baldacci said the program is not the ultimate solution, but it will help address at least some of the issues that young people face when deciding whether to stick it out here in Maine.

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'Opportunity' knocked and lawmakers opened the door

The Legislature was totally on board with the idea of tax credits to induce grads to stay in Maine.
by Justin Ellis

Andrew Bossie owes $27,500. Too bad irony does not pay bills.

For months the recent University of Southern Maine graduate has been working to see through a proposal that would give students tax credits for staying in Maine after graduation.

Two weeks ago the Opportunity Maine proposal was approved by the state Legislature and today is scheduled to be signed into law by Gov. John Baldacci. The initiative may be the first of its kind in the country.

Sadly, eligibility for the tax credit starts in January 2008, which means Bossie will be paying back his loans the old-fashioned way.

Still, he says, it helps knowing that others are going to get help with their loans.

"It's a step in the direction of making it more feasible and helping someone who wants to stay in Maine and wants to contribute to the state and not face major financial impediments along the way," he said.

As a law, the Opportunity Maine proposal would provide a tax credit to anyone who receives an associate degree or bachelor's degree in Maine and remains in the state to work following graduation.

Supporters of the citizen-initiated bill were expecting the proposal would be passed along to voters in a referendum this fall. But a funny thing happened.

On June 19 the House voted 142-0 in support of the bill; a day later the Senate voted 27-8.

It's only the sixth time in the almost 100 years that a citizen- initiated bill was approved without having to go to referendum.

"When the House vote came and it was unanimous we were kinda like, 'Whoa,' maybe we do have a chance," said Bossie.

Tony Giampetruzzi, spokesman for Opportunity Maine, said the next step will be educating the public about the new law and how to take advantage of it.

"We have not found anything that is as far-reaching in scope as this," he said. "We think it's a ground-breaking initiative and a model for other states."

The amount of the credit would be based on the amount of a loan payment, up to a maximum of $2,100 a year.

Graduates can take the credit, or their employer may take it on their behalf.

It's estimated the program will cost $160,000 in the first two years.

By building support for the program, they can to show the Legislature that it will be worthwhile to fund in the future, Giampetruzzi said.

Baldacci said he supports the Opportunity Maine tax credit because getting an education can make all the difference for individuals as well as the state.

"I believe in it, I know it's the key to opening up opportunities for people to realize their dreams," he said.

Baldacci said he understands that the cost of college has risen too high for many families and has become a barrier to higher education. "The reason a lot of kids aren't going on or not staying in Maine is because of the high debt that they have when they get out of school," he said.

Opportunity Maine's detractors have mentioned the potential price tag of the state providing tax credits to graduates. Baldacci said the tax credit means more workers, which means more people paying taxes.

Justin Alfond, state director of the League of Young Voters, attributed the success of Opportunity Maine to statewide petitioning and aggressive lobbying efforts at the capital.

"When we tested it, 73,000 Mainers jumped right in there with us and said we believe it's time that Maine looks toward an education policy that is for the long term, that looks towards economic development and workforce development," he said.

Alfond said the League and countless other volunteers were ready to head out, house-to-house, to supermarkets and salons, to canvass the state to raise support for the proposal had it gone to referendum. In the end, it wasn't necessary.

Alfond said more people recognize that an education is necessary to get ahead and that Maine's livelihood will depend on people going to school and entering the workforce.

For an aging state like Maine, this sends a message that the state values young people and wants to keep them around.

"It's exciting to see Maine doing this great policy work and investing in young people," Alfond said.

For Bossie, a kid who grew up in rural Maine whose parents' income was just below the state's average, the money piece makes all the difference in college. On top of loans, he had around $17,000 in scholarships as well as grants.

Bossie said there is still a lot more work to be done in addressing rising tuition and student-loan rates, as well as what else Maine can do to keep its young people here.

But Opportunity Maine can be a big first step, he said.

"It's an agreement with the state not to worry about repaying your loan," he said. "It's not a ball and chain, but (the tax credit) can be an added perk if you want to stay here."

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Holding On to Graduates - Inside Higher Ed

by Scott Jaschik

“Brain drain” is a perennial topic in legislatures, as lawmakers worry about whether their home state universities attract the best students and professors. This year, however, the discussion shifted a bit, with several states considering ambitious plans focused on what happens to students after they graduate and whether states could find ways to keep their graduates from flocking to New York City or Boston or the Silicon Valley like so many before them. While such plans have been common for specialized fields — health professionals in rural areas, for example — the plans being talked about this year were for all students and had much broader goals.

Indiana had the loudest debate about such a plan, which would have offered $20,000 in forgivable loans to top students who pledged to stay in the state after graduation — with repayment required if they left. The plan collapsed when some legislators objected to Gov. Mitch Daniels’s proposal to pay for it through franchising the state lottery to private entities — although Daniels, a Republican, is vowing to bring the idea back next year.

In Maine on Monday, Gov. John E. Baldacci, a Democrat, signed legislation to create a loan forgiveness program there — an idea that came largely from students who said they wanted to make it easier for those who would follow them to Maine colleges to stay in the state. Starting next year, Maine residents who graduate from college in the state will be eligible for 10 years of annual state tax credits of approximately $2,100 if they attended a four-year college and $1,000 if they attended a community college — provided that they needed the loans as part of a financial aid package. Graduates of private colleges are eligible as well.

The campaign for the tax credits came from student activists who in 2005 worked successfully to help defeat a state referendum that would have reversed a state law barring discrimination on the basis of sexual orientation. “A bunch of us who were working together said, ‘Hey if they can do the initiative process to try to do something terrible, why can’t we use it for something positive?’ ” said Andy Bossie, who was then a student at the University of Southern Maine, from which he graduated this year.

Bossie was on his way to wracking up $27,500 in student debt — not an astronomical sum, perhaps, for those attending elite private colleges, but a hefty amount for someone graduating in a state where salaries aren’t typically high. Talking with friends at Southern Maine and elsewhere, Bossie started to hear about more and more students who said that they loved Maine, but were looking for jobs out of state, feeling that the salaries in the state wouldn’t give them enough to live on and repay their loans.

About 50 percent of those awarded degrees each year in Maine leave the state (although the figure is inflated somewhat by some private colleges that attract students from national pools, who don’t necessarily have a predisposition to want to stay). The students decided to gather petitions to put a referendum on the ballot to create a tax credit and they created the group Opportunity Maine to do so.

“Too many graduates had been leaving the state even though they didn’t want to,” Bossie said.

This year, the students succeeded in gathering 73,000 signatures — well more than the 55,000 they needed. In Maine, when an item is declared eligible for the state ballot, the Legislature gets a shot at enacting the measure through the regular legislative process. While it is rare for the Legislature to do so, the campaign for the referendum attracted bipartisan support and the House and Senate sent the measure to the governor, whose signature Monday eliminated the need for a statewide vote on the measure.

Baldacci hailed the measure, saying it sent an important message to students: “If you live, work and pay taxes in Maine, you’re not going to have this student debt hanging around your neck.”

National experts on student aid and demographics have been dubious of the impact that tax credits like those in Maine can have. Generally, the criticism is that graduates look for cities with good jobs and — to a lesser extent — places they perceive as being exciting places for young people to live. In an opinion piece in Inside Higher Ed in January, Thurston Domina, of the Office of Population Research at Princeton University, outlined the difficulties brain drain states face in keeping their talent.

Some in Maine worry that the state may not get the transformation it is seeking with the tax credits. But many are hopeful and see evidence that the plan could make a difference.

Libby Heselton, a career counselor at Bowdoin College, said that as a Maine resident, she signed the petition to put the tax credits on the ballot and was excited to see the idea enacted into law. She said it’s hard to predict how much impact the tax credits will have with her students. But she said that many of them do say that “they’d love to stay in Maine, but sense that there’s more money elsewhere.” The extra help from the state might be enough to make Maine jobs more competitive, she said.

Cathy Marquez, assistant director of employer relations at the University of Maine, in Orono, said that she was concerned that some of the publicity about the campaign might send the wrong message about her graduates, 70 percent of whom stay in the state. She said that the greatest impact may be on students who aren’t on the business and engineering track, but who want to work for nonprofit groups or schools or social service agencies. The low salary base for many such jobs in Maine leads graduates to look to Massachusetts and Connecticut, even if they have strong ties to the state, Marquez said. “I think this could be a huge shot in the arm for those in human services,” she said.

And attracting more good schoolteachers and social workers may improve the state long term in ways that will attract more businesses, too, she said.

Bossie, the chief organizer of Opportunity Maine, said he realized that the availability of jobs and the choices of graduates are related. But he said that the tax credits will succeed in part because of other efforts going on to attract new businesses — and because there are jobs today that go unfilled because graduates leave the state.

A Caribou, Maine native, Bossie has accepted a job in Augusta with the Maine AIDS Alliance. Because the tax credits are not retroactive, they won’t help him — and he’s getting ready to start writing checks of about $250 a month.

But he said that students had accomplished something for those entering college now. And Bossie said he also has the benefit — through answering questions about student loans with examples from his own situation in interviews all over the state — of having “the best known student debt in Maine.”

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