Tax credit plan aims to stop ‘brain drain’

A ballot initiative to combat “brain drain” – the loss of college graduates to other states – will be put forth Tuesday by a group looking to establish a substantial tax credit for Maine residents who earn a state college degree and stay in Maine after graduation.

The Opportunity Maine political action committee will launch the Opportunity Maine campaign. The committee consists of a group of nine college students, graduates and working professionals from across the state who say not enough Maine residents are pursuing postsecondary degrees, and those who do end up leaving the state in search of higher income to pay off student loans.

The group’s proposed solution is a tax credit for any Maine resident who attends an accredited Maine college, university or community college – public or private – and remains in Maine after graduation.

Program participants who earn a bachelor’s or associate’s degree and continue to live and work in Maine would be able to claim a tax credit equal to the amount of any educational loan payments, up to a cap based on in-state tuition and fees at public institutions.

The criteria for applying for and receiving financial aid would not change under the plan.

“We want to address the issue of student debt and what effect it has when you graduate from college and how it affects our career choices,” said Rob Brown, the 33-year-old campaign director and Stockton Springs resident. “People are leaving the state for more money.”

The Finance Authority of Maine has reported that 53.6 percent of Maine college-bound students ultimately obtain their degrees from schools outside Maine, while 46.4 percent receive their degrees from in-state schools.

In 2005, 26.6 percent of Maine adults had a bachelor’s degree and-or graduate degree, according to the Maine Center for Economic Policy. Opportunity Maine hopes this figure will increase if the program is voted into action.

University of Maine System Chancellor Terrence J. MacTaggart issued a statement Monday that said he and the UMS board are impressed with the initiative and believe it is consistent with their own agenda.

The Opportunity Maine campaign also hopes to benefit Maine businesses and create a more skilled work force. Under the proposed legislation, business owners could send employees to school, make loan payments on behalf of the employee, and claim the full tax credit.

“Clearly the goals of this initiative are to increase the skills of Maine’s work force so that incomes go up in Maine,” said Rep. Richard Woodbury, U-Yarmouth, House chairman of the Joint Committee on Taxation.

Woodbury says that until a thorough analysis of the program is conducted, there is no way to know what the cost will be to the state.

“The question really is how many new people would be induced to go to college because of the tax credit being offered here, and how many people would be induced to stay in Maine who wouldn’t otherwise,” Woodbury said.

Opportunity Maine says it hopes the program will pay for itself. Higher paying jobs would generate higher tax revenues, offsetting the tax credits that individuals and businesses receive, Brown said.

Similar legislation has been explored in other states. Gov. Thomas Vilsack of Iowa unsuccessfully proposed an almost identical plan in 2001. Georgia’s Helping Outstanding Pupils Educationally scholarship and grant program encourages high-achieving students to attend a state college or university, but does not require them to remain in Georgia after graduation.

Woodbury said he is not aware of past state legislation that addresses the issue in “such a comprehensive and ambitious way as what the Opportunity Maine group is proposing.”

Opportunity Maine PAC has submitted legislation to the Secretary of State’s office and must gather about 60,000 signatures to place the initiative on the ballot for a vote in 2007.