A new plan to reduce tuition for middle class students in the CSU and UC systems was unveiled Wednesday by California Assembly Speaker John Perez. The plan would close a $1 billion tax loophole for large businesses.
Perez's program, the California Middle Class Scholarship, gives CSU and UC undergraduate students a two-thirds cutback in tuition if they come from a family with a household income of less than $150,000.
The scholarship would save CSU students about $4,000 a year, or $16,000 over four years, and $8,200 a year, or $33,000 over four years, for a UC student, according to Perez's website.
The plan is contained in two pieces of legislation, according to Perez's website. Assembly Bill (AB) 1500 would close the Single Sales Factor loophole, which allows large, multi-state businesses to avoid paying some taxes. AB 1501 creates the Middle Class Scholarship program that provides the scholarships to students.
Scott Spitzer, Cal State Fullerton political science professor, said he is unsure if Gov. Jerry Brown would support the bill.
"I don't think the governor is going to be against it, but I don't think he's going to throw his weight behind it," said Spitzer.
That is because Brown already has his own tax plan he is pushing for in the November election. Spitzer said his tax plan would increase taxes on the wealthiest Californians (those making more than $250,000) and instate a temporary 1-cent sales tax increase.
California's fiscal problems include an immediate $20 billion budget gap and a long-term business development and infrastructure overhaul, Spitzer said.
But, "investing in education is a very important way to help the economy," Spitzer added.
Spitzer went on to say that Perez's bill would ultimately help the state in the long-run by providing more opportunities for students to stay in college. When students cannot afford increasing tuition costs they must choose to take more student loans or drop out, he said.
"When we educate our state's citizens we're creating a whole new employed workforce that will be actively working in California, paying taxes, helping the businesses and organizations that they work for do better," Spitzer said.
Perez (D-Los Angeles) proposed the legislation to help middle-class Californians who ordinarily would not qualify for financial aid.
In a video for the Middle Class Scholarship, Perez said CSU fees have increased 191 percent and UC fees have increased 145 percent since the 2003-2004 school year.
In just five years, the yearly CSU tuition cost has risen from $3,340 in 2007-2008 to $6,120 in 2011-2012, according to the CSU website.
Spitzer said the CSU system had a $100 million cut last year. One of the ways the system made up for that was by "increasing tuition drastically by close to 30 percent," he said.
These budget cuts encouraged the California Assembly Speaker to promote the two bills.
"Too many families are getting squeezed out of higher education," Perez said according to a transcript on his legislative website.
Jake Morabito, 18, a Spanish major, said in the next two years, two of his five younger siblings will be in college.
"It's going to get really expensive," said Morabito.
Morabito lives in the dorms, adding another expense to his tuition. He received an academic Cal Grant scholarship and said his younger siblings will likely receive one too.
"(The state) needs to make sure that education gets proper funding so that way they can encourage more people like me and my family and (other people in) the middle class to get to college," Morabito said.
A nationwide Pew Research study found that nearly all college graduates (86 percent) found college to be a good personal investment.
"One of the great things about California is we have this extensive, public higher education system that made it possible for millions of Californians who weren't from upper-income families to go and get a good college education," Spitzer said. "Bottom line is higher education costs a lot of money, but it's well worth it."
The Middle Class Scholarship bill will be introduced to the Assembly Wednesday. It will require a two-thirds vote to move to the Senate.