I was fascinated by this article in the Boston Globe this week. The Globe reports that the state of Maine has decided to create financial incentives for recent college graduates to stay in the state. Specifically, grads will get tax-incentives if they are carrying student loan debt.
The tax credits would amount to a maximum of $2,100 per year, or $8,400 total, for a graduate who spent four years at a Maine college.
For those who might not follow such things, Massachusetts has been experiencing a population decline of late. One of the factors of this decline is that college students – and we have a LOT of colleges here – aren’t sticking around post-graduation. These students cite the cost of living as a big factor in not sticking around. You don’t need a PhD in system dynamics to understand that a declining population and losing the young employees is problematic in the long run.
But I’m not so sure I agree with Maine’s tactic. Average starting salaries for students with bachelors’ degrees ranged from $31K to $56K in the US last year. Is $2,100 per year enough to make a difference? For the engineers in the crowd, that’s as little as a three and change percent delta (without factoring in tax impact). Is that compelling?
I don’t know squat about Maine’s economy, but I have to believe that the general exodus is fueled by the weather and job availability moreso than any other factors. All of the happy people I know who live in Maine are either there because of proximity to family or they are, effectively, independently wealthy.
While I remain skeptical, it’ll be VERY interesting to see how this pans out. Maybe it’s something the Commonwealth should eventually explore…