Students Strongly Support AB 1500, Closing Elective Single Sales Factor Loophole to fund Middle Class Scholarship
SACRAMENTO—The Assembly Revenue and Taxation Committee heard AB 1500 today, a bill authored by Assembly Speaker John A. Pérez (D-Los Angeles), that will close a tax loophole benefitting out-of-state corporations in order to slash college fees by two-thirds for California's middle class families. Students from across California testified in support of closing the tax loophole and using the money saved to fund the Middle Class Scholarship Act. The measure will be taken up for a vote by the Committee on Revenue and Taxation at its meeting next week.
“I am very pleased AB 1500, which closes an egregious and unnecessary corporate tax loophole and uses the savings to dramatically lower student fees, was heard by the Assembly Revenue & Taxation Committee,” Said Speaker John A. Pérez. “We know the best way to restore prosperity and health to our economy is to invest in opportunities for California's middle class families, and that is exactly what the Middle Class Scholarship aims to do.”
Speaker Pérez's Middle Class Scholarship Act is contained in two pieces of legislation: AB 1500, which closes the wasteful elective Single Sales Factor loophole and deposits the revenues into the Middle Class Scholarship Fund, and AB 1501, which creates the Middle Class Scholarship program providing the scholarships for CSU and UC students and appropriating funds to community colleges. AB 1501 was heard and approved by a unanimous, bipartisan vote in the Assembly Higher Education Committee last week.
Closing the elective Single Sales Factor loophole by passing AB 1500 was strongly supported by students from around California. California technology companies BIOCOM, Cisco, and Qualcomm also testified on the importance to California businesses of closing the elective Single Sales Factor loophole.
“Closing this loophole will bring a billion dollars back into California from out of state corporations that can be used to provide relief to thousands of middle class families, and my fellow students and I are strongly in support of the Speaker's efforts to close this loophole and make higher education affordable and accessible for middle class students,” said Paul Murre, a junior at CSU San Francisco who testified in favor of the measure before the Committee.
The Middle Class Scholarship Act is a plan to make college more affordable for middle class Californians, covering students whose family income is under $150,000 but over the amount allowed to qualify for financial aid. CSU students will save $4,000 per year or $16,000 over a four-year period, UC students will save about $8,200 per year or nearly $33,000 over a four-year period, and Community College students will see their costs reduced significantly as well. According to estimates, 150,000 CSU students and 42,000 UC students would be eligible for the scholarship. Community Colleges would also receive $150 million to reduce costs for students.
In recent years, CSU fees have increased 191%, UC fees have increased by 145%, and community college fees have also increased significantly. Student loan debt has also reached an astronomical high, with national student debt figures breaking the trillion dollar mark and surpassing the level of credit card debt held by American consumers.
AB 1500 was heard, but not voted upon by the committee due to committee rules that require bills with fiscal policy changes to be considered and voted on at a later date. AB 1500 is expected to win approval from members of the committee, the majority of whom have co-authored the bill with Speaker Pérez.
For more information on the proposal, go to www.MiddleClassScholarship.com.
Website of Speaker John A. Pérez: www.asmdc.org/speaker
CONTACT: John Vigna (916) 612-7795
Opening remarks from Speaker Pérez at today’s Revenue and Taxation Committee hearing. (4:51)
Speaker Pérez says the tax loophole encourages companies to create jobs outside of California. (:12)
Speaker Pérez says some of the out of state corporations opposed to AB 1500 are headquartered in state’s with the same tax law AB 1500 would require. (:15)
Speaker Pérez says AB 1500 is good policy that invests in our collective future. (:07)
Speaker Pérez says, due to the skyrocketing cost of college, student debt has reached $1-trillion and left graduating students with a massive debt load. (:19)