Rhode Island Proposes Tax Credit for Nurse Educators

by VickyRN Staff

A special legislative commission in Rhode Island formed in May 2008 has come up with a proposal designed to counter a looming shortage of nurses in the state. To retain/recruit nursing faculty and thereby expand the number of nursing school graduates, the commission recommends that the state's nurse educators be given a $3,500 tax credit annually.

At a news conference unveiling the proposal on April 22, commission members cited projections indicating that Rhode Island will have a shortfall of 1,800 RNs by next year, growing to 6,500 by 2020. They stressed that the state?s nursing schools cannot handle the demand. For example, in 2004, nearly 3,900 people applied to nursing schools in Rhode Island, but only 737 were accepted. According to the commission's report, "Most of the schools of nursing reported faculty shortages as the primary reason why they cannot admit more nursing students."

Despite its conclusion that the state's faculty shortages are due to low pay, the commission opted to recommend the tax credit rather than an increase in school salaries. An increase, commission leaders said, would not be practical because, first, the state is in the midst of a budget crisis. Second, according to commission co-chair Senator James E. Doyle (D-Pawtucket), contractual issues at state nursing schools would prevent nursing faculty from receiving larger pay hikes than those teaching other disciplines.

Doyle acknowledged that if the tax credit is passed, the state could lose as much as $500,000 a year in revenue. However, he added, that would be offset by the economic benefits to health-care facilities that hire the graduates, saving millions of dollars in overtime pay, recruitment costs, and temporary help.

In addition to the tax credit, the commission recommends that in subsequent years the state should give priority to nursing programs, including the expansion, replacement, or renovation of existing facilities. The benefits accruing from the commission's recommendations are described in its report as follows: "Increasing funding and nursing educational capacity within Rhode Island is a win-win for all — the state economy gains knowledge-based, better-paying jobs which add significantly to the tax base, and the increasingly aging population of Rhode Island receives quality, efficient, and potentially less costly health care with the full inclusion of an educated nursing workforce."

Because the nurse shortage figures cited by the commission at its news conference raised a number of questions from nurses, particularly new graduates, who are having trouble finding work, the panel spent a good part of its conference explaining why local hospitals are not hiring. In essence, the commission members blamed the economy — the current lack of jobs for new graduates represents an anomaly that will change once the economy turns around.

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