Panel nixes tax credits for hiring Virginia graduates
Students receiving degrees from Virginia’s public colleges and universities may struggle to find employment, after a House subcommittee killed legislation that would have given small businesses a $2,500 tax credit for hiring such graduates.
House Bill 1303 was introduced by Delegate Charniele Herring, D-Alexandria, who proposed an incentive system for small businesses that hired people holding an associate’s or bachelor’s degree from a public institution of higher education in Virginia. In her eyes, small businesses are the cornerstone for moving graduates from the classroom to the real world.
“Small businesses account for more than 47 percent of employment to recent graduates, and it’s very important to provide tax incentives to encourage the hiring of our recent Virginia graduates,” Herring said.
“About 53.6 percent of recent higher education graduates have been unable to find a job, and that’s really what motivated me to pursue a way to give our students an opportunity to succeed after their education is complete.”
HB 1303 would have helped small businesses that hire Virginia public college graduates to fill new full-time jobs after Jan. 1 of this year. Those businesses would have received a $2,500 corporate income tax credit for each new full-time position. Businesses could have claimed the credit after the graduate had been employed for at least
a year. Virginia college students supported the measure.
“I believe the tax credit ensures a move in a more positive direction and will encourage small businesses to hire recent graduates and help minimize the unemployment rates we’re seeing right now,” said Alex Henery, a student representative from Radford University.
“If businesses are given a deductible to hire these graduates, then they may be more inclined to take a chance on those whose experience stems predominantly from the classroom.”
The bill set a cap of $2 million for the tax credits. The tax credit program would have automatically expired in 2015.
HB 1303 did not cover private colleges and universities in Virginia. That is the main reason why House Finance subcommittee No. 3 decided to table the bill.
Herring argued that the financial ceiling set in the bill did not make it realistic to provide tax credits for hiring graduates from private institutions.
“I thought there was a more natural nexus for public universities, and with the money accessible, it’s not an effective tool in encouraging small businesses to hire all students who graduate from a college or university in Virginia,” she said.
Delegate Joseph Johnson, D-Abingdon, was intrigued by the bill. He noted that some parents are suing colleges and universities because their children could not find employment upon graduation.
For example, Trina Thompson, a 27-year -old New York graduate, and her parents are suing Monroe College in the Bronx for the $70,000 she spent on tuition because she has been unable to find a full-time job.
“There have been numerous class-action lawsuits brought on by parents whose kids have been unable to find jobs after school,” Johnson said. “Students majoring in visual arts, history, performing arts and English, to name a few, are finding it extremely difficult to find jobs. It’s becoming a new trend here in the commonwealth and throughout the nation.”
On a voice vote of 5-0 on Friday, the subcommittee tabled HB 1303, suggesting it be revised to provide tax credits for hiring graduates from private as well as public colleges.
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