The Wall Street Journal cited Live and Work in Maine and the Opportunity Maine Tax Credit in their coverage of Connecticut’s efforts to retain college graduates.
In an effort to stop young talent from leaving the state, Connecticut lawmakers have proposed a tax break for college graduates who stay put.
The tax credit, proposed by Democratic lawmakers, could help new graduates offset the cost of their student loans. It also could help the Constitution State retain some of the roughly 14,000 young people who graduate annually from the state’s more than 30 higher education institutions, including Yale University and the University of Connecticut, say its supporters.
The goal is to improve the state’s labor pool at a time when population growth has been sluggish. Connecticut lost nearly 30,000 residents to other U.S. states from July 2015 to July 2016, more than double the loss from five years earlier, according to Census figures. The state hasn’t seen any population growth during the past three years. “It’s really trying to take advantage of our talent here in the state,” said Democratic Speaker of the House Joe Aresimowicz.
The tax credit is available to anyone who earned an associate, bachelor’s, master’s or doctoral degree from an accredited higher-education institution in Connecticut. A graduate who attended an out-of-state school could qualify for the credit if they moved to Connecticut within two years of earning the degree. The credit can be claimed for a maximum of five successive years.
The proposal has broad support in the state’s House of Representatives, which is controlled by Democrats. Republicans also have backed similar proposals in recent years, but none joined the Democrats to co-sponsor this bill.
The measure is similar to a program introduced in Maine in 2008 which got off to a slow start but has been gaining steam. Only 14 people took advantage of it in 2008 when the program launched, according to Maine Revenue Services. But by 2015, more than 5,000 graduates claimed the tax credit, costing the state $9 million. “That is just getting traction,” said Nate Wildes, engagement director of Live and Work in Maine, an organization hired by the state to market the tax credits.
Maine also started marketing the program to employers for the first time this year, and expects even more people to take advantage of the program, Mr. Wildes said. Now, businesses will be able to claim the credit on behalf of the employee and pass the money on to the graduate as a bonus or pay raise.
Connecticut lawmakers are looking for ways to build the state’s economy, which lost about 2,000 jobs in 2016, the year General Electric Co. left suburban Fairfield after decades to relocate its headquarters in Boston. GE’s departure highlighted the state’s need to invest in its workforce, Mr. Aresimowicz said. “Part of the reason GE left for Boston is for that young talent pool.”
The Connecticut proposal would base the amount of the tax credits on a percentage of the graduate’s total income. Lawmakers don’t have a current estimate for how much the tax break would cost the state.
Connecticut’s population growth for people between the ages of 20 and 34 has been a mixed bag for the state. It lost more residents in this age group to other states than it gained for seven of the past eight years. But if people who moved to Connecticut from abroad are included, the state added more people in that age group than it lost each year during that same time frame.
A 2016 survey by the University of Connecticut found that its college graduates were more likely to work in the state if they also had attended high school in Connecticut. The poll found that 75% of 1,475 people who attended high school in the state and graduated from UConn’s undergraduate program worked in Connecticut. That figure compares with 26% of 310 graduates for those who didn’t attend high school in the state.
Steven Lanza, assistant professor in residence at UConn’s Department of Economics, said he’s skeptical that tax credits would play a major factor for new graduates deciding where they want to begin their career. Future job opportunities and quality of life are much more likely to be significant factors, he said. For those who are undecided, however, “this could just be enough to do the trick and convince someone to stay in state rather than leave,” he said.
Elliot Rogers, 22 years old, said he’s debating whether to move to Massachusetts or stay in Connecticut after he finishes graduate school at the University of Connecticut School of Social Work. He expects to complete graduate school this year with about $42,000 in debt, and said a tax credit could convince him to stay. “Any help…would drive where I live,” he said.
Appeared in the Apr. 03, 2017, print edition as ‘Tax Credit Aims To Keep Grads In Connecticut.’