House bill would exempt recent graduates from state income taxes if they stay in state

Forty percent of graduates from Mississippi’s public universities have left the state five years after graduation, according to a recent report commissioned by the state College Board.  

On Wednesday, the House passed a bill  118-0 seeking to slow that brain drain from the state. The bill would exempt recent college graduates from state income taxes if they stay in the state for three years after graduation from a four-year college or university. They could get an additional two-year exemption if they buy a house or establish a business with at least one additional employee. It also provides the exemption for a licensed teacher.

“House Bill 1550 is designed for us to have a discussion on the issue,” said Rep. Trey Lamar, R-Senatobia, who authored the bill. “I have seen a lot of this (brain drain) with the people I went to school with…We want to keep our best and brightest from leaving the state.”

State Higher Education Commissioner Glenn Boyce said reversing the trend of college graduates leaving the state is critical to the state’s economic vitality. He cited a report by researchers at Georgetown University, projecting that by 2020, 65 percent of all jobs in the economy will require post-secondary education and training beyond high school.

Rep. Credell Calhoun, D-Jackson, asked Lamar what it would do to the state budget if the bill is passed.

Lamar said he didn’t believe there would be much impact on the state budget because most recent college graduates don’t pay much income tax anyway.

But Lamar added an amendment to the bill to cap the total exemption amount at $5 million annually in tax revenue.

Lamar also said the College Board should market the tax exemption to colleges in the state if the bill becomes law.

Some lawmakers have questioned the brain drain report of 40 percent leaving the state because it didn’t report on how many of the students were originally from out of state when they came to a state university.

A report prepared for Gov. Phil Bryant by Mississippi State University National Strategy Planning & Analysis Research Center shows that over the last 10 years the number of out-of-state students has grown at a faster rate than in-state students at state colleges and universities.

But the report also says a large majority of students in two- and four-year colleges choose to live and work in the state.   

House Bill 1550 defines a recent graduate as one who has been awarded a bachelor’s degree and/or post- graduate degree from a college or university no more than one year preceding Jan. 1 of the first calendar year for which the recent graduate claims a deduction under this section.

State Rep. David Baria, D- Bay St. Louis, applauded the bill, saying his two daughters will klikely attend college out of state, but the bill could lure them back to the state.

House bill would exempt recent graduates from state income taxes if they stay in state

CLOSE Forty percent of graduates from Mississippi’s public universities have left the state five years after graduation, according to a recent report commissioned by the state College Board. On Wednesday, the House passed a bill 118-0 seeking to slow that brain drain from the state.