I like TOPS as much as any other middle-income parent with a child attending a tuition-subsidized Louisiana public university. Yet, here’s the dirty secret: My son, who just began his freshman year, has made it clear he’s out of here the second he earns that degree. My daughter, a senior in high school, doesn’t want to wait that long, declaring an out-of-state college and then life in NYC—or Europe—is where she wants to be.
We can debate TOPS from multiple angles, but let’s acknowledge what the program has become: A workforce development program for states like Texas funded by the taxpayers of Louisiana. Too frequently this state subsidizes the college education of our native sons and daughters, only to see way too many of them leave for out-of-state cities offering jobs with higher pay, even more really smart young people and, by their standards, better quality of life options.
We all get the strong public appeal of TOPS, but as public policy it makes little sense the way it’s playing out. It’s especially problematic given the challenge Baton Rouge—and the rest of Louisiana—faces in convincing young educated people to live here. This must change if we’re going to truly diversify our economy in a knowledge-based world.
Bluntly put, TOPS isn’t getting the job done, so it’s time to try something else.
The program doesn’t need to completely disappear, just limit it to qualified low-income students (or steer them to the Go Grant program, and fully fund it) as well as the best and brightest of our state. For those living above the poverty line, TOPS goes only to those who graduate high school with a 3.5 core GPA and at least a 30 on the ACT.
For everyone else, the financial inducement to stay comes after graduation. Borrowing a page from Maine, which also needs more college-educated young residents, Louisiana should institute a tax credit program that allows college graduates who choose to live here the ability to deduct student loan repayment costs from their state tax bill.
This Educational Opportunity Tax Credit is available to any graduate—native or not—of a Louisiana public or private university who lives and works in the state and is saddled with student loan debt. Moreover, anyone who graduates from an out-of-state college with a high-demand STEM degree qualifies for the tax credit if they move here.
In short, if you paid $2,500 in student loans for the year and owe Louisiana $3,000 in taxes, then you get a pre-tax-credit, meaning you’re only on the hook to the state for $500. Maine’s program goes so far as to cut a check to those with select degrees (STEM) whose student loan tab exceeds their state tax burden.
The tax credit remains in place as long as student loans are being repaid and you live and work in the state.
An educated workforce is the key ingredient in any state’s economic development formula and, let’s not kid ourselves, Louisiana is failing miserably in that regard. So why would a state that has no problem offering lavish tax breaks and negative effective tax rates to big industry have any qualms with incentivizing our most vital resource—educated young people—to live, work and play here?
Deny it if you want, but the dynamics of today’s economy are not the same as those bygone days when our economic fortune was hitched to the quality of our natural resources—oil, gas, fertile fields, timber and the Mississippi River. Toss in a network of rail lines, an Intracoastal Waterway, some canals and a handful of interstates and you were pretty much good to go.
No doubt, Baton Rouge and Louisiana are still wed to such an economy—and state and local officials bend over backward to keep the manufacturing giants happy and profitable. But ask yourself this: If doing business this way is so great, then why is this state—once one of America’s wealthiest—now one of its poorest?
What happened? Quite simply, the policies that once allowed Louisiana to economically flourish—low taxes and low wages that attracted plants and blue-collar jobs—are no match for an innovation economy that favors cities with concentrations of capital and educated workers.
Let’s be clear: It’s flat wrong to dismiss the economic value of ExxonMobil and the industrial sector. But it’s equally wrong to ignore the indisputable fact that the companies where are our children crave to work are basing their location decisions on the quality and quantity of a city’s educated workforce.
And while the mighty Mississippi ain’t going anywhere, people are—especially the more educated ones. Which is why so many of our sons and daughters now live in places like Houston, Dallas, Atlanta, Nashville, Charlotte and Washington, D.C.
Baton Rouge, right now, isn’t one of those destination cities.
Educational attainment is typically used as the measure for the skill level of a workforce. It’s not a perfect measurement, as it fails to account for skills acquired in career and technical programs in high school or credentials programs at community colleges. But it’s the best we’ve got for understanding the big-picture problem we’re facing. In East Baton Rouge Parish, 34.5% of the working-age population has a college degree—just a hair above the 34% national average. In Baton Rouge, that figure is a slightly lower 32.4%.
OK, great, but then consider this: In the northern Virginia cities that won the Amazon economic development lottery, the numbers are 74% for Arlington and an eye-popping 78% in Falls Church. This helps explain why Stephen Moret, the former economic development czar of Louisiana, is bringing the high-paying, much-desired Amazon jobs to the Commonwealth while Don Pierson, our current economic development head, is chasing an Amazon regional distribution and fulfillment center for what remains of Cortana Mall.
In other words, how can Baton Rouge seriously hitch its economic wagon to anything other than industry and public-sector employment when we simply don’t have the educated workforce necessary to attract the knowledge-based research and technology jobs that our children are demanding?
Sure, it’s great to declare ourselves the next great American city. Go crazy talking about our remarkably low taxes. Toss out financial incentives like doubloons at Mardi Gras. Celebrate the friendliness of our residents. Preach the quality of our cuisine, the sportsman’s paradise and the remarkable beauty of a sunset over the bayou. But here’s the thing: That stuff really doesn’t matter as much to Apple or Amazon or Albemarle (remember them?) as it does to us.
There are other reasons, for sure, why tech companies aren’t looking hard at Baton Rouge. Our monochromatic population doesn’t especially mesh well with companies that pride themselves on diversity. Failing to pass a tolerance ordinance, even a nonbinding one, tends to send a message—and it’s not a good one.
It’s not about agreement, but it is about tolerance.
Without question, former Gov. Bobby Jindal and his minions in the Legislature went way too far in the slashing of higher-education funding. Yes, universities must do better with philanthropy, marketable research, tech transfer and other revenue-producing public-private partnerships. What’s also true is the state must fund higher education to a level that provides top-level instruction while keeping tuition low enough to get more students educated.
And it needs to provide an incentive to retain and attract an economy’s most precious resource—a smart workforce.