PROVIDENCE, R.I. (AP) — A Rhode Island college-debt tax-credit program that will end this year unless it’s extended in the state budget received a questionable review from the state Office of Revenue Analysis.
Gov. Gina Raimondo has proposed extending the Wavemaker Fellowship for three years and granting access to math and science teachers, the Providence Journal reported Tuesday.
However, it is unclear if the fellowship has incentivized hiring or convinced people to work in Rhode Island, according to a 61-page report by the state office.
The Wavemaker program provides yearly refundable tax credits for four years to full-time Rhode Island employees with a degree in science, technology, engineering or math. Associate-degree holders are eligible for $1,000, bachelor-degree holders are eligible for $4,000, and master-degree holders are eligible for $6,000.
“In the case of the Wavemaker Fellowship program, it is difficult to determine how much the program affects an individual’s decision to work in Rhode Island,” the report stated. “It is not unreasonable to think that this tax incentive is large enough to impact such a decision, given the maximum credit/refund allowed over a 4-year period.”
The report analyzed $1.5 million in Wavemaker tax credits awarded to participants in 2017 and 2018. Of the 395 participants in those two years, 8% lived out of state and worked in the state, and 11% in 2018.
The report indicates that in order for the program to break even, 60.5% of participants would have to work in Rhode Island only for the tax credit.
The report highlighted potential equity issues stemming from the lack of an income limit, which allows high earners to benefit the most. The report also noted administrative costs in 2018 that made up 13% of expenditures, or $134,000.
The Rhode Island Commerce Corporation, the organization that administers the program, said in a written response that a straight cost-revenue analysis is not the best way to measure the success of the program.
“Wavemaker was built in response to Rhode Island companies seeking tools to attract and retain a highly educated and highly skilled workforce,” the corporation wrote. “It provides an incentive to employees by defraying student loan costs, creating the pool of talent companies need to grow and remain strong."