Share the Wealth

It looks like multi-billion dollar companies Chrysler, General Motors, International Paper, Kimberly-Clarke and Procter & Gamble are preventing educational access, stirring up opposition to state legislation that would create a scholarship for middle-income college students. Their dissent is hardly a shocker: The Middle Class Scholarship Act, introduced by co-author and Speaker of the California Assembly John Perez (D-Calif.) in February, would raise corporate taxes on these companies to direct the money toward a middle-class scholarship program that would slash fees by two-thirds for families earning between $80,000 and $150,000.

Basically, it’s the students versus the corporations, and we shouldn’t let the state prioritize big business over education without one hell of a fight. Though the bill has broad bipartisan support in the state legislature, widespread student support is also crucial. Sign the petition, as per A.S. President Alyssa Wing’s request below, and get involved.

Students making under $80,000 a year already receive extensive financial aid packages, but those coming from families making between $80,000 and $150,000 receive little help. Due to the burden caused by increasing student fees (UC fees have increased 145 percent since the 2003-04 school year), these students need all the help they can get. The Middle-Class Scholarship Act would effectively decrease student fees to what they were pre-crisis — lower than they were in that 2003-04 year.

But the act doesn’t actually “raise” corporate taxes to do this — it’s simply eliminating an unfair loophole. The Middle Class Scholarship Act consists of two bills — AB 1500 and AB 1501 — with AB 1500 eliminating a part of a 2009 budget deal that allows out-of-state corporations to choose the tax rate they owe California. AB 1501 would then establish the Middle Class Scholarship Program and allocate the money saved from AB 1500 to the program. The act would generate $1 billion in revenue, with approximately 42,000 UC students receiving a Middle Class scholarship to save $8,169 per year. About 150,000 CSU students will save $4,000 per year. Further, $150 million will be distributed to the California Community College System, to be allocated at the discretion of the individual colleges.

The elimination of the tax loophole will also help California businesses by leveling the playing field against these large, out-of-state corporations. Because of this loophole, out-of-state corporations gain about a billion dollars in tax advantages over the in-state companies they are competing with.

And the money from the act will go directly to students who qualify — not to the general UC fund, where it won’t necessarily benefit students. But if student fees increase, under the fixed $1 billion budget of AB 1501, students would receive the same relief they got before the increase.

Basically, the Middle Class Scholarship would provide tuition relief, but it won’t prevent tuition itself from going up. Herein lies the act’s only real problem: It won’t provide the relief it intends if the UC sees it as an opportunity to increase student fees without, seemingly, repercussions as large as they would have been before.

When it comes to the community college system, AB 1501 might not be the best possible relief either. Money toward community colleges shouldn’t go toward tuition cuts, since, at about $1,500 a year, the colleges are usually affordable for middle-class students. In reality, living expenses tend to be higher than college expenses, especially when students can’t even get into the classes they need. In the 2009-10 academic year, for example, close to 140,000 entering students were unable to register for a single course. But either way, the community colleges will be allowed to reduce fees however they see fit, whether it be through decreased course costs or cheaper parking permits. Though offering more classes would be the best solution, cost reductions would also be an undeniable relief to many.

While there are certainly other statewide needs the money from AB 1500 could go toward, we firmly believe that education should be a priority. For every dollar we spend on higher education, the state gets a $3 return on its investment. With the Middle-Class Scholarship Act we can effectively increase the number of students who can attend college, while also offering concrete, economic relief to families that will really affect their lives for the better — all while sticking it to the man (read: corporations). How perfect.

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