The Middle Class Scholarship Act, a measure that would have cut UC and CSU fees by two-thirds for middle-class students, failed to pass the Senate on Aug 31. Authored by John A. Perez, D-Los Angeles, the legislative bill had passed the Assembly but failed to obtain the necessary two-thirds in bipartisan votes. During the final hours of the Senate meeting, state senators proposed including multiple revisions to the original bill which made reaching an agreement difficult. The bill was voted on in its original form, but lacked five necessary votes to pass, with a final tally of 15-22.
“Unfortunately, even though most Senate Democrats supported the Middle Class Scholarship Act, we could not reach agreement with Senator Lou Correa (D-Santa Ana) or Senate Republicans that would achieve the two-thirds vote necessary,” said Assembly Speaker Perez.
The Middle Class Scholarship Act consisted of two bills, AB 1500 and AB 1501. The legislative bill AB 1501 established the Middle Class Scholarship Program, which aimed to slash UC and CSU tuition by 60 percent for families making less than $150,000 a year. While the former, AB 1500, would have provided funding by proposing the closing of a tax loophole, predicted to generate $1 billion annually. Previously passed in May, AB 1501 will become obsolete if there is no funding to support it.
When out-of-state businesses operate in California, there are two options provided in terms of tax calculation. One option would apply a sales formula, whereas the other takes into consideration sales, property, and payroll. Critics argue that the passing of AB 1501 will remove the latter option, effectively raising taxes to an estimated $1.2 billion in 2012-13, according to the California Legislative Analyst’s Office.
In a recently released statement, Speaker Perez said, “It is disturbing that Senator Correa and so many Republicans would refuse to stand up for the middle class and instead continue to support a tax giveaway that favors out-of-state companies over our own.”
Amy Jenkins, Senator Correa’s chief of staff, said that representatives from some corporations had noted that their companies would potentially end their business in California if such a tax revision was implemented, as reported by the Daily Californian.
Jenkins further pointed out that Correa’s record on higher education showed that he fought hard to protect that funding but also tried to advance a pro-growth and pro-jobs initiative. “What he was trying to do here was strike a balance,” he said, about Correa’s “no” vote.
Angelica Salceda, the University of California Student Association’s president, said, “Many students were really hopeful that it would pass.” Salceda noted that these students would have been able to use the middle class scholarship to fund their educational goals without worrying about their financial situations.
“Legislators need to start prioritizing higher education… They should be funding [higher education] and one of those opportunities was the Middle Class Scholarship Act,” stated Salceda.