By BOBBY HARRISON / Daily Journal
The House, with no dissenting votes, approved a bill Wednesday to exempt college graduates working in the state from having to pay a state income tax for three years.
The bill, authored by Rep. Trey Lamar, R-Senatobia, is being touted as an effort to address what some believe is “a brain drain” of young college-educated Mississippians leaving the state for better paying jobs.
In recent years, the Legislature has passed about 50 tax cuts that will take more than $700 million out of the state revenue collections when fully phased in. Lamar argued his bill would not have a negative impact on the state revenue collections since college students most likely were not paying taxes prior to earning their degree.
There was no debate about whether the potential income tax revenue from the college graduates could go to replace revenue lost from Mississippians who might have been paying taxes but were no longer because of retirement or for other reasons.
Still, under the current form of the legislation, the tax credit would be capped at $5 million annually. It is not clear what would occur after the state awarded $5 million in tax credits.
While the cap is in the bill, Lamar said he does not believe it is necessary because he does not believe the state will be losing money on the proposal.
“This is designed to get a conversation going on brain drain,” Lamar said. “I think this is an issue. I know a lot of people grow up here and do not come back.”
The bill would exempt people who gradate from college within the past year and go to work in the state from having to pay income taxes for three years. Recent graduates who are teachers or who start a business and employ at least two people or who purchase property could get an extra two years of credits.
He said he hopes by then the people would have “put down roots” and would not be leaving the state.
Lamar said because of the brain drain “we are losing some of our best and brightest.”
The bill would apply to someone who earns a four-year degree from a Mississippi school or a Mississippi resident who earns a degree from an out-of-state school.
The bill now goes to the Senate.
There has been much talk in recent years about the so-called brain drain in Mississippi.
Research by the state’s universities has found that more than 40 percent of graduates of Mississippi universities leave the state within five years of graduation. Glenn Boyce, commissioner of higher education, has cited a lack of good-paying jobs for those departures.
But others dispute those numbers.
Lt. Gov. Tate Reeves said recently that when not including out-of-state residents attending Mississippi universities the number of Mississippi college graduates leaving the state is similar to what is occurring in the rest of the nation.
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