Gov. Tom Vilsack proposed a tax credit for college graduates Tuesday to help pay off their college debts – if they stay in Iowa after they graduate.

The tax credit is only for Iowa residents who graduate from an Iowa college, work in Iowa and pay Iowa income tax, said Joe Shannahan, press secretary for the governor. This doesn’t help out-of-state students or students who decide to take jobs outside the state after they graduate.

“We are taking some tough challenges today as a country and a state,” Shannahan said.

“The state is in an economic slowdown with shrinking revenue. There are some difficult choices ahead and sacrifices for all of Iowa.”

The governor made his announcement in response to the budget cuts announced Thursday for the three regent universities that total almost $47 million, Shannahan said.

“This is a good initial step by the governor,” said Andy Tofilon, Government of the Student Body president. “It is really better than anything we have right now. Anything the state or governor can do is appreciated.”

GSB would rather see lower tuition increases, he said.

“It is a bit too late, and the flood gates are open to the people leaving the state,” Tofilon said. “This is not going to deter students from leaving the state.”

Legislators wonder where college graduates will find jobs when they have to compete with those unemployed, said Sen. Johnie Hammond, D-Ames.

“[The governor] is assuming that in two years, the economy will turn around and that is when the tax credits will start kicking in,” she said.

At the present time, the governor isn’t being offered many options, Hammond said. Republicans won’t stop giving tax cuts or tap into the “rainy-day fund” – a fund the governor can take from in an economic emergency, she said.

The revenue office is saying revenues in the state will not increase over the next few years, and the governor has to address the problem, Hammond said.

The Iowa Board of Regents released a preliminary base tuition increase of 11.5 percent at the beginning of September. At the September meeting, the three regent university presidents asked the regents for a higher tuition increase of around 15 percent to help recoup budget cuts and keep quality at their institutions.

The regents decided to send the proposed base tuition increase back to the Board’s staff and have them re-evaluate the numbers. The staff will come back with a different base tuition increase proposal in October. The regents have delayed their vote on the proposal until the November meeting.