Program would be a win-win situation for students and state

What’s left to do in this legislative session?

The answer is considering a citizen initiative that will advance the future of Maine: “Opportunity Maine.” This initiative deserves support from everyone who wants to help young college graduates find rewarding jobs and raise their families in Maine. It deserves support from everyone who wants to help displaced workers, single parents, and others get training to start new careers.

Opportunity Maine allows Maine college graduates who agrees to live and work in Maine to earn a tax credit to help pay their student loans. College has become expensive, but in today’s global economy, it is a worthy expense.

There is no more valuable resource than young people. Unfortunately, upon finishing a degree, most students are heavily indebted. To make ends meet, too many leave Maine for proverbial greener pastures. Worse still, too many young people, displaced workers, and parents never pursue degrees to begin with.

Maine leads in graduating students from high school. Fifty-seven percent of high school graduates pursue higher education, with 69 percent meeting their objective. Thirty-one percent stop after earning a two-year diploma, while 69 percent complete four-year degrees. Every individual who fails to obtain a degree is a lost opportunity for Maine’s economy, but there is yet another round of attrition for those who do earn their degrees.

More than half of Maine’s graduates leave the state (though some do return later). In the interim, Maine faces the new economy with 23 percent fewer degree-holders than other New England states. It is no coincidence our incomes are 25 percent lower than New England as a whole.

Studies proves the importance of a college degree. Data suggests an associate degree means an additional $10,000, and $16,666 for a bachelor degree, beyond a high school graduate’s earning power.

Students now graduate with an average debt of over $21,600, and inflation is going to increase that number. We need to be proactive in protecting and advancing this valuable commodity – our college graduates. Providing a modest tax credit is expected to do wonders for attracting these students.

So, how much will it cost?

According to the Maine Revenue Services, the first year of the program carries no cost, and the second year a small cost of less than $150,000. Credit for each student would be capped at $1,532 for associate degrees, and $5,532 for bachelor degrees, but average credits claimed would be far below those amounts.

Return on the credits is projected to pay for itself by 2015, and will trigger revenue growth in the economy. Opportunity Maine, who launched the initiative, projects the costs of the tax credits will grow from about $1 million in 2009 to $55.8 milllion in 10 years. Offsetting this is projected growth in tax revenue from the graduates’ income from $875,000 to $74.8 million by 2018.

This is a win-win, for our students and our state.

There are downsides. This is not a perfect legislative solution, and suffers from parochialism. The state would be better served making the same offer to Maine students who obtain degrees from outside the state, who then return to Maine for employment and raise their families here.

We need to take this step first, however, and offer this incentive to those who stay and earn their degrees here in Maine. Once we establish the clear advantages, we can perhaps take the next step.

The Taxation Committee, by a 12-1 vote, sent this initiative to the full Legislature for debate and, hopefully, enactment. It is perhaps, some say, the most significant initiative to come out of Taxation in this session.

Please encourage your legislator to support this important initiative.

Rep. L. Gary Knight, R-Livermore, is a first-term legislator serving Leeds, Livermore, Livermore Falls and Wayne.