Perez’s proposal, announced Feb. 8, would undo a 2009 tax break for out-of-state corporations that would help reduce tuition for certain students by up to two-thirds.
If passed by the legislature, UC students whose family income is too high to qualify for Cal Grants, but still below $150,000, would qualify to receive around $8,200 in tuition breaks annually.
Cal State students in the same financial demographic would qualify for around $4,000. The cost of tuition, excluding housing and student fees, is around $12,000 a year at UC campuses and nearly $6,000 at Cal State schools.
“The pressures of the recession and massive fee increases have eroded, or even ended, the dream of higher education for too many California families,” Perez (D-Los Angeles) said in a statement. “Now it is time for our state to reinvest in our system of higher education. The California Middle Class Scholarship does that by closing a loophole for out-of-state corporations and slashing fees by two-thirds for thousands of California students.”
Announced in a video on middleclassscholarship.com, Perez’s proposal would end tax loopholes for corporations that cost the state $1 billion every year.
The new scholarship fund would assist an estimated 42,000 UC students and 150,000 Cal State students. Community colleges would also receive an increase in funding of around $150 million.
“California is on the mend,” Perez said. “And one of the best ways we can help that continue is enacting the Middle Class Scholarship and helping reclaim the promise of higher education as an economic engine for our state.”
UC President Mark G. Yudof released a statement in which he applauded the proposal and said that affordable tuition for all students was a priority.
“As we work with the governor and legislators on fiscal and policy issues that would affect the affordability of a UC education, we welcome constructive efforts such as the speaker’s proposal to provide middle-class tuition relief,” Yudof said in the statement.
In order for the proposal — which is divided into bills AB 1500 and AB 1501 — to pass, the California legislature would need ‘yes’ votes from two-thirds of both the Assembly and the Senate.
Republican state senate Republican leader Bob Huff released a statement Feb. 8 that urged Democrats to seek other ways to help finance education besides raising taxes.
“Republicans have long argued that the low income students are heavily subsidized and that the UC and Cal State are relative bargains for the more affluent students,” he said in the statement. “Let’s first enact the Governor’s pension reforms and balance the state budget then we can better assess the need for changes in tax policy and higher education.”
Based on the current configuration of California legislators, several Republicans would need to support the legislation in order to ensure passage.