By Kim Kalunian, WPRO News
Two bills in the Rhode Island General Assembly aim to tackle what has become known as the “brain drain” -- the emigration of educated people with specific skill sets -- plaguing Rhode Island.
Senator Ryan Pearson (D-Cumberland, Lincoln) and Rep. Chris Blazejewski (D-Providence) have introduced legislation that would incentivize college graduates to stay in Rhode Island after completion of their schooling.
Senator Pearson’s bill has been dubbed the “Stay Invested in Rhode Island Tax Credit,” which would give college grads a tax credit on personal income taxes for those who reside and work in Rhode Island for up to ten years after graduation. The credit would be based upon the principal balance of the student’s loans.
“Legislation is all about solving problems, and this bill provides solutions for two,” Pearson said in a statement.
A recent study found that Rhode Island students have the fourth highest student loan debt in the country. Pearson said the bill would help students pay off their loans while stimulating the local economy.
“The fact is we are in the midst of a brain drain in Rhode Island, and having some of our best minds leaving to go find work outside of our borders is negatively impacting our recovery process as a state,” said Pearson.
A recent report by WPRI.com showed that 10 percent of Rhode Islanders in their ‘prime working-age’ have left the state over the past several years to find jobs elsewhere. Pearson said his bill would give Rhode Island a competitive edge over its neighbors; he is unaware of any other state with similar legislation.
“We need to do more to retain our college graduates,” said Pearson. “This bill provides them a real financial incentive to stay while giving employers an advantage that will help them create new jobs.”
The bill would allow each graduate the ability to claim a tax credit of up to 10 percent of his or her undergraduate or graduate loan balance. The amount could not exceed $1,000 for an associate’s degree, $5,000 for a bachelor’s degree or $6,000 for a graduate degree in any single tax year. Pearson said the cost of the tax break to the state has not been calculated yet.
Rep. Blazejewski’s bill, “The Job Creation Through Educational Opportunity Program,” would give graduates of Rhode Island’s higher education institutions tax credits on their student loan payments if they work and live in the state post-graduation. The bill would also allow employers to claim the tax credit if they assist their employees in paying off student loans.
"I think it's important that we break the vicious cycle of talented young students who graduate from our fine universities and leave because they can't find a job," Blazejewski told WPRO Tuesday. He said more employers would move to Rhode Island if they knew there was a talented pool of skilled workers to pull from.
Blazejewski introduced the bill in 2011 and 2012, but it never made it to a floor vote.
Blazejewski said the bill is based on a law in Maine. He said when it comes to passing the bill in Rhode Island, it will come down to how much the program would cost the state.
"The finance committee is going to take a look at it and figure how much it will cost," he said. "Hopefully this year they'll find a way to support it."
Both bills have been referred to committee but neither has been scheduled for a hearing.