Gov. John Baldacci signed into law Monday what’s being called a first-in-the-nation student tax credit program to help Maine college graduates pay off their loans – a proposal with a $62-million price tag 10 years out that proponents say will be offset by more educated young people working and paying taxes in Maine.

The proposal was brought to the Legislature by the group Opportunity Maine and the League of Young Voters, which collected 73,000 signatures to put it on the statewide ballot. Instead of waiting for the referendum vote in November, legislators overwhelmingly decided to adopt the plan themselves.

In fact there were only eight legislators in the entire Statehouse – all Republican senators – who voted against the bill, saying the tax break was too broadly worded.

“This is a wise investment in our children’s future and our state’s economic future, and I believe it will pay huge dividends,” Baldacci said at an enthusiastic bill-signing ceremony punctuated with applause.

“This will require a lot of commitment on our part into the future,” the governor said. “I am very much committed to this.”

The new law allows any Maine resident, who earns a college degree at a Maine school, to take up to $1,500 off their income taxes for loans taken out for an associate degree and $5,500 for a bachelor’s. Opportunity Maine estimates the average tax credit, however, will be between $1,000 to $2,000. The credit caps were determined based on the cost of going to the University of Maine System or the Maine Community College System, but students attending private in-state colleges would be eligible.

Graduates must continue to live and work in Maine to get the credit.

While the state’s fiscal office has estimated the program will cost $62 million in lost income tax revenue by 2017, proponents say the higher wages earned and taxes paid by college graduates would offset that loss. They say the program should break even by 2015.

Majority Leader Rep. Hannah Pingree, D-North Haven, a strong proponent of the tax credit, said the price tag is large, but the cost of doing nothing is even greater.

“If we don’t find a way to keep young people in Maine and paying taxes, we’re in trouble,” she said, referring to Maine’s status as the oldest state in the nation in terms of median age.

Pingree said the Legislature should keep tabs on the tax credit to make sure it’s working, but she doubted it would be amended dramatically.

“The Legislature in passing this made a commitment,” she said. “If we get 5,000 people enrolled, it’s going to be hard to take away this credit.”

Pingree, in fact, would like to expand the program to Maine students who attend out-of-state colleges and come back to live and work in Maine.

Sen. Phil Bartlett, D-Cumberland, said the credit will help keep young people in Maine, and is something the state can do to make higher education more affordable.

“One of the most poignant things I hear is the fear in parents’ voices that their kids won’t have a chance to live and work in Maine,” Bartlett said.

Sen. Richard Rosen, R-Hancock, the assistant minority leader, was one of the eight Republican senators to vote against the bill. He thinks the law needs to be fine-tuned.

“Of course I support the goal of helping Maine students over the burden of their tuition debt and encouraging them to stay in Maine. I voted against the proposal because as currently written it was extremely broad and open-ended, and I thought it should have been more focused and affordable,” Rosen said.

“It will be the subject of amendment,” he added.

Members of Opportunity Maine know an amendment is possible since the Legislature can alter any law it passes, but on Monday they committed to making the program work.

“What were witnessing is the first in the nation,” said Justin Alfond, director of the Maine League of Young Voters. “An entire generation is now gong to see what this can do.”

Alfond said it was up to supporters to “keep pushing harder than ever to make sure this succeeds.”