By ADAM DOSTER

College graduates in Maine may no longer be looking off into the distance when it comes to searching for jobs.

Andrew Bossie was tired of bad ballot referendums. After spending the fall of 2005 with Maine student activists and the League of Young Voters fighting a referendum that would have gutted an anti-discrimination bill written to protect Maine’s gay population, he decided to go on the offensive and use the same process to address the needs of Maine’s students.

“People were dropping out of school because they couldn’t afford it, people were leaving the state after graduation instead of contributing back and growing the economy,” he says. “It was a huge problem.”

So the former University of Southern Maine student body president and his newly created political action committee, Opportunity Maine, developed a proposal that would ease some of the financial burden of going to college. Then, Bossie and 500 volunteers logged more than 12,000 hours canvassing on street corners in the brutal Maine winter to gather the 73,000 signatures needed to put their proposal on the ballot in the November 2007 election.

But a funny thing happened on the way to election day. Legislators grew so enamored with the bill that they pre-emptively passed it—only the sixth time in a century that Maine lawmakers enacted a citizen’s initiative without sending it to statewide referendum. So as of June 22, help is on the way for Maine students in the form of Opportunity Maine, an innovative local answer to the student debt crisis.

Opportunity Maine authorizes tax credits to refund educational loan payments for any Mainer who earns an associate’s or bachelor’s degree in Maine and then proceeds to live, work and pay taxes in the Pine Tree State after graduation. While the amount available for the credit would be capped at the cost of tuition and fees for the University of Maine system or the Maine Community College system, students at costlier private colleges can also apply for the break. As it stands, a graduate with a bachelor’s degree can be reimbursed up to $2,100 per year for four years. And, in a coup for the business community, employers can agree to make the loan payment on behalf of hired students and then claim the tax credit themselves.

This particular bill is good for Mainers because the state’s economy is at a crossroads. The decline in quality manufacturing and natural resource-based jobs has caused average income to drop 30 percent below the New England average. Meanwhile, Maine has one of the highest high school graduation rates in the country, but only 57 percent of students pursue higher education, mainly because of financial constraints. And those who do graduate college leave school with an average debt of more than $21,000 (the seventh highest in the nation), a main reason why 53 percent of students leave Maine for higher compensation in places like Massachusetts.

While the state’s economy is on the ropes, all is not lost. According to “Charting Maine’s Future,” an October 2006 report by the Brookings Institution, the building blocks for a diverse and vibrant economy remain. For one, in the past seven years the state has witnessed a substantial population boom, jumping from 46th to 26th in the country in annualized growth rate. Maine also outperformed the nation in job creation during the last economic cycle and has seen growth (albeit humble) in high-tech industries like boat-building, advanced materials and biotechnology. But, the report warns, “Maine’s aging population includes too few young workers and too few highly skilled or educated people.”

“There’s been a growing awareness of how important it is to have a highly educated population if you want to stimulate an economy and be competitive,” says Anya Kamenetz, author of Generation Debt. “And Maine is very aware that they have catching up to do.”

The bill’s major strength is its attractiveness to multiple constituents. It eases the increasing burden of college payment for students and their families. Businesses will grow more competitive with an influx of talented applicants. The state will benefit with an injection of new tax dollars and consumption. And proponents claim that financially, the proposal will break even or better by 2015, as the state generates more income as a result of higher income taxes and a stronger economy. “I think the essence of it appeals to a lot of people because it’s a really good idea and one that’s really needed,” says Brian Hiatt, communications director for the League of Young Voters.

Some critics contend that the law should also include Maine residents who attend out-of-state colleges but still want to move back home. Others question its focus on Maine at the expense of the national economy. But such dissenters are few and far between. Kamenetz says creating incentives for educational attainment could strike a chord with students rights’ activists nationwide.

“While it’s a really isolated local effort, it does go farther than most of these national actions because you’re actually paying off people’s loans, you’re not just lowering the payment,” says Kamenetz. “If it does have an economic benefit for Maine, it has a chance to be a model for others.”

Adam Doster is a freelance writer based in Chicago.
He is a frequent contributor to In These Times.

God Bless America, Disney-style

Most folks hunker down on the Fourth of July with a warm hot dog and a cold soda. But 1,000 people gathered at Walt Disney World near Orlando instead to take the oath of U.S. citizenship. Then they paraded down Main Street U.S.A. Corny, perhaps, but also a reflection, experts say, of the desire to become Americans at a time when the political universe is angrily divided over the issue of illegal immigration. The new citizens hailed from far and wide—Bangladesh, Guatemala, Switzerland, to name a few places—and were feted with Gloria Estefan singing the national anthem. And, of course, a fireworks display.

Slowing the Maine Brain Drain

Likening it to the GI bill, state legislators in Augusta, Maine, passed a new tax credit on student loans this week unlike any other in the nation. Opportunity Maine, as the program is known, will provide tax breaks for anyone with an educational loan who receives an undergraduate degree from an in-state institution and continues to live and work in the Pine Tree State after graduation. The hope is that the program will encourage younger residents to remain in the state, which has an aging population and fewer job opportunities than some other New England states. “We’re telling our students: If you live, work, and pay taxes in Maine, you’re not going to have this student debt hanging around your neck,” said Gov. John E. Baldacci. The bill reaches out to multiple age groups, like career professionals and working mothers, to lighten the load of continuing education. Companies are allowed to assume the credit as well if they bear the burden of their employee’s loans.

The Mayor and the ‘Relationship’

It was a scandal that Los Angelenos last week were comparing to a telenovela, the steamy soap operas of Spanish-language television. No wonder.

Battered by persistent rumors, Mayor Antonio Villaraigosa, 54, was forced to acknowledge that his “friendship” with Telemundo newswoman Mirthala Salinas, 35, who had covered the mayor while a political reporter, was now a “relationship.”

The bombshell came months after the mayor, the first Latino to lead the city in 133 years, stopped wearing his wedding ring (aides insisted it was being “resized”) and weeks after his wife of 20 years filed for divorce. In the category of can’t-make-this-up, it was Salinas who told Telemundo viewers that the mayor and his wife were splitsville.

How the scandal will affect the mayor, who aspires to become governor in 2010, and Salinas, on leave while station execs review her actions, remains to be seen. But soap opera watchers are waiting to see if the mayor will drop “Villaraigosa,” a melding of his and his wife’s surnames, and revert to Villar. Stay tuned.

E-ZPass…E-Z PayMore

Beachgoers winding their way along the New Jersey Turnpike this summer might want to think twice before choosing E-ZPass, a system that lets drivers pay tolls electronically. New research by Massachusetts Institute of Technology economist Amy Finkelstein suggests such systems lead to toll hikes.

The exodus of college graduates from New England to jobs in other parts of the country saps the region of the young, creative minds that are needed to build a competitive, knowledge-based economy. The out-migration affects all the region’s states, but it is especially pronounced in Rhode Island. The loss of talented students after graduation has left behind a static population and a pool of older workers without the skills to encourage companies to relocate or expand here.

“The brain drain,” first identified years ago, has been blamed on the state’s high cost of living, especially for housing, a culture of insiders that doesn’t welcome newcomers, poor links between employers and the schools and the lack of economic opportunities. The issue comes up regularly at meetings of business groups and at the State House. But nobody has come up with an answer in Rhode Island.

This year, while state legislative leaders and Governor Carcieri spent their time mired in a fight over spending priorities and plugging holes in the budget, their counterparts in Maine looked forward to come up with a plan to curb the brain drain from their state. Their experiment, considered the first of its kind in the nation, attacks two problems: the high cost of a college education that leaves a student with an average of $22,300 in debt and the out-migration of graduates.

It works this way:

Any resident who earns an associate or bachelor’s degree in Maine and then lives, works and pays taxes in the state is eligible for a maximum tax credit of $2,100 per year, or a total of $8,400 for the four years of schooling.

And there’s this twist:

The new law that takes effect in January allows employers to make the loan payments for graduates they employ and claim the tax credit. The idea is to keep Maine graduates in Maine by offering a financial incentive to help them pay down their student loans; and to encourage employers to reach out and hire Maine graduates.

“This is a wise investment in our children’s future and our state’s economic future,” said Maine Gov. John Baldacci.

There’s a taxpayers’ cost to all this. By one estimate, the tax credits will cost the state’s 1.3 million residents an estimated $150,000 during the next two years. Within 10 years, the cost could grow to $62 million. That price tag may take aback Rhode Islanders, who are already paying among the highest taxes in the country for a government, even with its heavy tax collections, that can’t pay its bills.

But proponents of the tax credit in Maine argue that keeping the state’s human capital from fleeing will help the creation and expansion of taxpaying businesses, as well as create a new pool of taxpayers. They have a study that shows that by 2018, the state will actually have a net gain, after the tax credits are included, of $15 million.

Here’s something else to consider:

The tax credit idea in Maine was not developed and pushed by the insiders — the lobbyists, college administrators, or business special interests. Rather, it came from the bottom up, from a grass-roots organization of students and community leaders called Opportunity Maine, that put together some compelling statistics that showed that more than 50 percent of the nearly 7,000 students who earn an associate’s or bachelor’s degree in Maine leave the state for extended periods.

“We’re trying to combat the high cost of student education and student loans,” said Andrew Bossie, president of Opportunity Maine. “On top of that, we’re trying to address the economic problems of the state. We have lower income and fewer degree holders than any other New England state.”

Opportunity Maine joined with the League of Young Voters to collect 73,000 signatures to put their proposal to a referendum in November. But that was forestalled when the legislature overwhelmingly passed a bill, the governor signed it, and the tax credit was created.

Bossie and other advocates admit the tax credit is an experiment, and it’s unclear how well it will work or how much it will cost. But the point is that Mainers are trying to solve what everyone agrees is a problem. They are tired of seeing the best and brightest of their students drift away. They’re tired of seeing a stagnant economy fall further behind other regions of the country. They’re tired of waiting for business and political leaders to do something.

There’s a lesson there for Rhode Islanders. jkostrze@projo.com

AUGUSTA — With applause filling his office, Gov. John Baldacci on Monday signed what is described as the nation’s most far-reaching law to keep the state’s best and brightest from fleeing after graduation by offering tax credits to reimburse their college loans.

“The eyes of the nation are looking at Maine,” said Justin Alfond of the League of Young Voters, which helped push the Opportunity Maine bill that was enacted with a historical flourish before the legislative session closed in late June.

The law, described as Maine’s version of the GI bill that was signed by President Franklin D. Roosevelt 63 years ago, attempts to end a “brain drain” of Maine college graduates, who have headed to other states in search of better pay to meet the demands of their college loans, among other expenses.

It provides tax credits to reimburse educational loan payments for any Maine resident who earns an associate or bachelor’s degree at a state college or university and then lives, works and pays taxes in Maine.

Opportunity Maine also offers an option allowing a Maine company that hires a Maine college graduate to take the credit if it assumes the former student’s loan debt.

Although other states have similar proposals and programs that target people in specific careers such as teaching, Maine’s new program is believed to be the nation’s most far-reaching, said Tony Giampetruzzi, Opportunity Maine spokesman.

Before it was unanimously approved by the Maine House on June 19, the Legislature’s lone World War II veteran, Kittery Democratic Rep. Walter Wheeler, compared Opportunity Maine to the GI Bill of Rights as he made a pitch for passage.

The GI bill, or Servicemen’s Readjustment Act, was signed into law by FDR on June 22, 1944, and provided payments for school tuition, fees, books, supplies and subsistence allowances.

Maine’s benefits can be claimed only while a recipient lives and works in the state. Tax credits would have a maximum of $2,100 per year, or $8,400 total for a graduate who spent all four years at a Maine college.

Baldacci admitted Monday that the law will require a major commitment by future legislatures if the program, which has a two-year startup cost of more than $150,000, is to remain funded.

“I can tell you I am personally committed to this,” said Baldacci, a Democrat who was re-elected to a four-year term in 2006.

“I often wanted the ability to be able to do this, but we have struggled financially over the years. We finally have been able to get to a point where we can get our head above the water and make investments in higher education.”

A coalition that launched a citizens drive last year collected thousands more voters’ signatures than they needed to force a referendum. Recognizing popular support for the plan, the Legislature opted to enact the proposal itself instead — something that had been done only five times previously.

“This is a huge deal for our state,” said Democratic Rep. Hannah Pingree, majority leader in the House, which approved the bill 142-0.

Hours after Baldacci signed the state bill, U.S. Rep. Tom Allen, D-Maine, held a news conference to trumpet similar federal legislation he has introduced to create Lifelong Learning Accounts.

Employees would contribute after-tax money to savings accounts that would be employer-matched and portable.

Employees would get tax credits on the first $500 they contribute to the account, and would receive a tax deduction on subsequent savings.

There would be no tax penalty for funds withdrawn for educational costs, Allen said.

Americans need such a program to keep their skills sharp amid the rapid pace of technological innovation and increasing international trade that changes jobs, Allen said.

“There is a real need in our work force for continuing education,” said Allen.

A Senate version of the bill has been introduced by Sens. Maria Cantwell, D-Wash., and Olympia Snowe, R-Maine.

Copyright © 2008 Blethen Maine Newspapers

By David Abel

Maine Governor John E. Baldacci will sign a law today that will provide tax credits to help cover the cost of college loan payments for students who earn degrees in Maine and remain in the state.

Activists say the multimillion-dollar program, passed unanimously last month by Maine’s House of Representatives and with little opposition in the Senate, is the first of its kind in the nation. They also said it is only the sixth time in the state’s history that an initiative introduced by a citizens’ group had been passed by the Legislature.

“I believe in this legislation, and I know that it is the key to opening up opportunity for Maine’s students,” Baldacci said in a statement. ” This is about our generation helping the next one. We’re telling our students: If you live, work, and pay taxes in Maine, you’re not going to have this student debt hanging around your neck.”

The program helps reimburse loans for any resident who earns an associate’s or bachelor’s degree in Maine and then lives, works, and pays taxes in the state. It also allows employers to make the loan payments and claim the credit.

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.

Over the past year, the activists who support the program collected 73,000 signatures, enough to send the proposal to voters as a referendum in November. But the Legislature bypassed the referendum process and passed the bill in the final days of its 2007 session.

Maine needs the program because more than 50 percent of the nearly 7,000 students who earn associate’s or bachelor’s degrees there every year leave the state for an extended period, according to Opportunity Maine , the group that launched the initiative.

Many students who earn bachelor’s degrees leave the state because they graduate with an average $22,301 in loans, said Andrew Bossie , president of Opportunity Maine.

“We’re trying to combat the high cost of student education and student loans,” Bossie said. “On top of that, we’re trying to address the economic problems of the state. We have a lower income and fewer degree holders than any other New England state.”

Maine’s House voted 142-to-0 for the measure and its Senate voted 27-to-8 in favor. Those who voted against the bill, all Republicans, cited future costs.

Over the next two years, the program — which is not retroactive and takes effect in January — will cost the state’s 1.3 million residents an estimated $150,000. But within 10 years, the cost is estimated to exceed $50 million.

Senator Richard Nass , a Republican who is a member of the Joint Standing Committee on Taxation, said he voted against the bill because the state has higher priorities.

“As I look at the state’s financial situation, here we are now obligating ourselves to college students at a time when the poorest of the poor are getting kicked off Medicaid,” he said. “It was ludicrous to be paying off college loans at the same time we’re in trouble with Medicaid.”

He added: “I don’t share some folks’ concern for college students. Many of them are talented and fortunate. They are acquiring for their own benefit, and all of us, the potential to earn a lot of money. They will be able to easily pay off their loans. I don’t think we need to provide them money from our treasury.”

Supporters of the measure said it would pay for itself. They cited studies that show the program would benefit the state by about $15 million by 2018.

Senator Ethan Strimling , a Portland Democrat, said the program is a good investment

“Maine is losing a lot of young people, and this is a great opportunity to build long-term economic sustainability and keep young minds here,” he said. “It hurts our economy in the long term when we loose so many young minds who could be vitalizing our community. This could help stem that tide.”

David Abel can be reached at dabel@globe.com

By KATIE ZEZIMA

BANGOR, Me., July 2 — Seeking to discourage Maine college graduates from leaving the state, Gov. John Baldacci signed a bill Monday giving tax credits to lower the cost of student loans for those who stay in the state.

The program, called Opportunity Maine, starts in January and will apply only to new loans. The tax credit will last 10 years, or until the recipient moves out of state.

“This is about our generation helping the next one,” Mr. Baldacci, a Democrat, said in a statement. “We’re telling our students, If you live, work and pay taxes in Maine, you’re not going to have this student debt hanging around your neck.”

The tax credits will be capped at $2,100 a year, about the cost of taking 10 credits at the Orono campus of the University of Maine, not including fees.

The program was initially brought forward as a ballot initiative spearheaded by young college graduates. It was passed by the Legislature instead of going to the voters.

Proponents of the legislation say they know of no other similar program. A Montana state senator has proposed granting $500 tax credits to students who remain in that state, while a similar ballot initiative proposing tax incentives for students who stayed in North Dakota failed in 2003.

State Representative Emily Ann Cain, Democrat of Orono, said the initiative passed because it was a “good idea.” Many students now leave the state in search of higher-paying jobs to help defer the cost of student loans, Ms. Cain said.

“There’s no cost-of-living adjustment for a student loan,” Ms. Cain said. “A 10-, 20-thousand-dollar loan is the same in Massachusetts or Maine. We’re trying to take the edge off.”

The legislation passed the House unanimously and the Senate 27 to 8. Opponents said they were concerned about the cost of the program.

Opportunity Maine is projected to cost the state $50 million in the next 10 to 15 years and perhaps more if the program is extended to new Maine residents who graduated from colleges outside the state, Ms. Cain said. The Legislature has not determined how it will pay for the program.

Proponents say the program will ultimately pay for itself because, unlike many state scholarship programs that offer free tuition but do not require residency after college, Opportunity Maine keeps graduates in the state to help the local economy.
“This really has two objectives: to make education more affordable and accessible to the students of Maine, and keep people in Maine who want to stay here,” said Tony Giampetruzzi, a spokesman for Opportunity Maine