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CA legislators want to raise corporate taxes to cut education costs

February 9, 2012 · Posted By: Pippa Gage

With the state continuing to defund higher education, lawmakers in the California are scrambling to try and make up for their constant cutting of funds.

California State Assembly Speaker John Pérez (D-Los Angeles) announced a plan that would raise taxes on out-of-state corporations, with the aim of generating enough revenue to cut college fees by two-thirds for middle-income college students in California.

Both the UC and CSU systems have seem significant increases in tuition over the last five years, with the CSU has seen a 20 percent increase in the last year alone. This is due in large part to the state continually slashing their operating budgets.

The proposal is contained in two pieces of legislation, AB 1500 and AB 1501. The first bill would close tax breaks for out-of-state corporations. Under the second bill, extra revenue generated by the suspension of the tax break would be transferred to a new scholarship program for UC, CSU and community college students, according to a statement on Perez’s website.

“The pressures of the recession and massive fee increases have eroded, or even ended, the dream of higher education for too many California families,” Pérez said in the statement.

UC President Mark Yudof acknowledged the plan in a statement released this afternoon.

“Like Assembly Speaker Pérez, we are deeply concerned about ensuring affordability for middle-class students who don’t qualify for financial aid,” Yudof said in the statement.

Middle-class students at UC Berkeley will be getting a break once a new policy goes into effect next year.

Middle-class families — those earning between $80,000 and $140,000 — will pay no more than 15 percent of their income, according to McClatchy D.C. As part of the deal, UC Berkeley will pay the difference, save $8,000 to be paid by the student through work or loans. In total, the deal will save families 11 to 61 percent, depending on income. Out-of-state students will get the same price break on the in-state portion of dues but will still be required to pay the $22,878 out-of-state fee.

According to the Chronicle, the new plan will cost the school $10 million to $12 million per year, and UC Berkeley plans to fund it through a combination of private donations and an aggressive push for out-of-state students.