It”™s déjà vu in the state legislature as lawmakers aim to stop the flight of young adults from the Nutmeg State.
State lawmakers are considering a bill that would both expand and mandate a program aimed at retaining graduates of Connecticut colleges by offering them tax incentives in exchange for starting a business or buying a home.
If the legislation sounds familiar, that”™s because it is. A similar bill was passed by the General Assembly in 2012, and called for incentives to be made available to graduates who choose to buy a home in Connecticut.
Students who graduate from Connecticut colleges after Jan. 1, 2014, would be eligible under the 2012 legislation, but the state Department of Economic and Community Development (DECD) has yet to provide a plan for the program”™s implementation, with officials citing budget challenges.
State Sen. Art Linares is co-sponsor of the new bill, which would expand the original plan to also apply to graduates who start a business in Connecticut and would mandate that DECD take the necessary steps to implement the incentives.
“There are just so many young people leaving our state after they go to our public universities,” Linares said. “We have very bright students here. We should do more to encourage them to start businesses here, buy homes here and live here.”
Connecticut has garnered a reputation as being a “brain-drain” state, with large quantities of graduates finding work outside the state. Proponents of the legislation hope to reverse that trend.
However Jim Watson, a DECD spokesman, said the original program approved in 2012 has not been allotted funds given the state”™s budget challenges.
Watson said the incentives could cost up to $1 million annually in lost income tax revenue and would cost an additional $86,000 annually in personnel expenditures and $150,000 in startup and marketing costs.
The program, dubbed “Learn Here, Live Here,” would enable graduates to sign up for an account with the state that would allow a graduate to set aside up to $2,500 of the state income taxes they owe each year for up to 10 years after their graduation.
Participants could then withdraw the money at any time within those 10 years for a one-time lump sum to be used for either buying a house or starting a business. Under the proposal, a withdrawal could only be made once and those who graduated before 2014 wouldn”™t be eligible.
Linares, a 24-year-old Republican whose district includes Old Saybrook and parts of Middlesex County, said he wasn”™t sure why the DECD wasn”™t implementing the original program, save for the argument that it would take money away from the general fund.
“As young people start to create business in the state through this program, we will have more people paying taxes and more people employed in the state,” he said. “I think it”™s a great bill and it makes sense financially.”
State Rep. Christopher Davis, another co-sponsor, said the bill could help reverse trends that make Connecticut unattractive for young people. Currently homeownership among young adults is at an all-time low and Connecticut ranks near the bottom for entrepreneurship and starting a business, Davis said.
With the bill, he said, “We aren”™t losing revenue as a state,” he said. “We”™re enticing young people to stay here and investing in them.”
Davis, 26, is also a Republican, representing East Windsor and Ellington.
The bill is awaiting a vote by the Commerce Committee of the General Assembly. If passed there, it would progress to the full General Assembly.
If it is not passed, any plans to implement the 2012 measure would be at the discretion of the DECD.
