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Are scholarships as "vital" to state as Douglas claims?

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Gov. James Douglas created a stir late last week by suggesting he would veto the state budget if the Legislature does not include his college scholarship proposal. The governor says the 15 year, $175 million program is “vital to the state’s economic future.� Where’s the proof to back up such a claim? There isn’t any.

Rather, the governor has a hunch that his program might keep a few Vermont high school graduates from moving out of state to attend college and, perhaps, they would then settle down and raise a family in Vermont. The program would pay up to 1,000 students a maximum of $5,000 a year to attend college in Vermont. What the state gets for its money is a three-year obligation from the student to work in the state after they graduate.

We applaud the governor’s intent: to increase scholarships to state colleges for Vermont students in the hope they become permanent state residents. We even suspect his hunch is correct for a few students. But there are many doubts as to the effectiveness of the overall approach. Consider:

• With UVM tuition and expenses at nearly $20,000 per year, $5,000 is certainly an incentive, but not the over-riding decision-maker. State colleges are less expensive, and for students aiming for those schools the scholarship amount would be significant. But many of those students are very likely to be the same ones who would be going there with or without the extra incentive.

• As for working in the state for three years after graduation to satisfy the scholarship requirement, that’s not much of a commitment. A student would easily agree to work as a ski bum for three years before launching into a career elsewhere. And what’s the penalty if the student decides to leave — to pay back the $20,000 maximum he or she received over four years. If the job offer out of state is good enough, they’ll leave in a heartbeat and pay off the loan if that’s what’s required. Who wouldn’t? It’s essentially a student loan and we doubt the repayment plan is overly punitive.

• Fiscally speaking, the state doesn’t even get the money (which comes from the national tobacco settlement and may be $5 million less than projected this year alone) Douglas is using to fund his program until 2008. That’s a bit like counting your chickens before they hatch.

• Finally, there’s no direct correlation between college graduates staying in the state for three years and the creation of good-paying jobs. And if the jobs aren’t here, the students won’t stay regardless of the incentive. A more direct approach might be to put the $175 million program into job creation, or specialized training in existing workplaces that are seeking students with particular skills.
What’s even worse is that the governor speaks — “I’ve made clear it’s vital� — as if his program is the primary way the Legislature has to strengthen the state’s economy. Nonsense. More realistically, this program was hatched in the governor’s campaign office to provide Gov. Douglas with something to talk about besides the state’s ailing health care system. To that end, the campaign ploy has worked. The state media has bit hook, line and sinker and Douglas has successfully diverted much of this year’s legislative media coverage away from health care. It’s not that job creation and keeping our youth from fleeing aren’t important issues, but they certainly weren’t being talked about last year and suddenly it’s the governor’s top legislative priority.

That’s a good campaign strategy, but is it good public policy?

Before sinking $175 million into a 15-year program, the Legislature might want to appoint a study committee to research the governor’s idea this summer and demonstrate, if possible, a likely success rate. After all, a year’s delay would make virtually no difference in the outcome on the state’s economic vitality; though the study could prove the idea is bigger on rhetoric than on results.

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