Free college tax bill would cost CA businesses

May 2, 2012

By Katy Grimes

SACRAMENTO — Faced with a growing state deficit, instead of cutting the size of California’s government programs, lawmakers have squeezed higher education. With dramatically higher tuition in just a few years, it’s the the middle class which has suffered the most. Low-income college students qualify for aid programs, and the wealthy can afford the higher tuition costs. But middle class students have been forced to pay the higher fees, most of which have been done through sizable student loans.

Assembly Speaker John Pérez, D-Los Angeles, authored AB 1500 and AB 1501 to help pay college tuition for middle class students, but his funding solution is higher taxes. Perez’s claims that AB 1500 and AB 1501, which will “end tax loopholes for billionaires,” will fund a “two-thirds savings” on college tuition for middle-class students.

Someone has to pay for the college tuition scholarships.

At a hearing in the Assembly Higher Education Committee Tuesday, Perez presented AB 1501, which would establish the Middle Class Scholarship Program under the administration of the Student Aid Commission.

AB 1501 would provide a grant for students at the University of California and California State University with family incomes below $160,000. “Students currently take out debt or parents forgo other expenses,” Perez said at the hearing.

Perez said a tax loophole which benefits out-of-state corporations needs to be closed in order to fund the middle-class scholarship for earners making less than $150,000.

Perez had five college students with him who testified about the hardships they suffer under the current college system.

“I work two jobs. This bill would help people like me. I deserve to go to college,” said Kevin Feliciano, a community college student. Feliciano said AB 1500 would help him go to a university while adding little debt.

Each of the other students testified about working two to four jobs. “I’d like to be able to party and study in the same day,” Tatianna Bush said. Bush, who works four jobs, said she used to be on honor roll, but was unable to stay on honor roll once she added the third and fourth jobs. “We are underworked and underpaid,” Bush said.

After a 10 minute lineup of community college and state university college students, as well as many labor unions in support of the bill, the only opposition came from the California Manufacturers and Technology Association.

“We do not oppose the bill, but disagree with the characterization of the funding mechanism of the bill,” said Dorothy Rothrock, with the CMTA. Rothrock challenged the notion of “out-of-state businesses” in California, and said many of these businesses run large distribution centers, and have large payrolls in the state.”It’s not a loophole,” Rothrock said.

AB 1500 would fund the scholarship “through increased taxes by requiring most corporate tax filers to use the Single Sales Apportionment Factor to calculate their tax liability,” the CMTA explains in its opposition to AB 1500. “In 2009, as part of the budget deal at the time, the Legislature adopted an elective Single Sales Factor that went into effect last January and provides corporations the option to pay state taxes based solely on the amount of sales they have in California — rather than a percentage of business conducted within the state.”

The CMTA opposes AB 1500 and calls the funding scheme “an unjustified $1 billion tax increase on companies that create jobs, pay taxes on their property, sales and payroll receipts, and have employees in California.”

Assemblyman Marty Block, D-San Diego, the committee chairman, told the committee to disregard Rothrock’s comments. “This is just the policy portion of the bill,” Block said. However, it cannot be ignored that AB 1500 is the funding mechanism for AB 1501.

It Is A Tax Increase

“The Middle Class Scholarship will be paid for entirely by closing a wasteful out-of-state corporate loophole. This win-win opportunity for middle class families and California’s future economy needs your help to make it a reality,” the website Perez set up to promote the bills states (bold emphasis in original).

According to Perez, eliminating the option and thus forcing companies to use Single Sales Factor would generate an estimated $1 billion. But the funding for AB 1500 and AB 1501 would come on the backs of businesses already struggling under California’s heavy regulatory burden and near-record high taxes.

The Legislature is responsible for the out-of-control tuition hikes, which they have imposed knowing that students would instead just turn to student loans, financial aid and grants to fund higher education.

No Academic Requirements

Assemblywoman Kristen Olsen, R-Modesto, asked Perez if there were any academic requirements in the scholarship program as there are with Cal Grants. Perez said there were not, that just the entrance requirements imposed by the UC and CSU schools were enough.

However, more than 50 percent of California college students not only do not pay for school at the state’s public colleges and universities. And the dropout rate is also about 50 percent. This is because, along with all of the free money for school, there are very few academic requirements.

Low and middle-low income students receive state-funded grants and fee waivers to cover education fees. It’s not difficult to imagine the Middle Class Scholarship Program also turning into just another free money program, with no accountability.

“One of the companies affected by this in my district provides hundreds of really good paying jobs,” Olsen said. “This would pit college students against job creators.”

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  1. CalWatchdog
    CalWatchdog Author 2 May, 2012, 08:55

    “I’d like to be able to party and study in the same day,” one of our young scholars said. So, she wants tax increases pay for her partying. How typical of the whole bankrupt government regime, especially the rancid “education” sector.

    — John Seiler

    Reply this comment
  2. Prattle On, Boyo
    Prattle On, Boyo 2 May, 2012, 09:52

    If the State Assembly can make taxpayers finance a FREE ride for ILLEGAL Mexicans then why not help out middle class AMERICANS go to college?

    Reply this comment
  3. Beelzebub
    Beelzebub 2 May, 2012, 10:19

    “Assembly Speaker John Pérez, D-Los Angeles, authored AB 1500 and AB 1501 to help pay college tuition for middle class students, but his funding solution is higher taxes”

    Yep. Porky wants to give away more free crap for votes. Throw in a side of babyback pork ribs too and you got a deal, Porky. Not the bones either. Leave the meat on.

    “AB 1501 would provide a grant for students at the University of California and California State University with family incomes below $160,000. “Students currently take out debt or parents forgo other expenses,” Perez said at the hearing”

    Quite seriously, have these people lost their fing minds? What is this? Let’s Make a Deal and behind door #3 is cradle to grave ‘I got your back’? And Jerry Clown can’t understand why big business considers California the leper of entreprenurism? Come do business with me and let me infect you!!! heh. Christ, I might go back to school at my old age and learn to be a debt counselor so I can hand a kleenex to my clients while they tell me their sob stories about the big bad government taking all their hard-earned cash. My calendar will be full everyday with a lineup down the block. I’ll make as much as Warren Buffet then I can prime the pump on Capital Hill to get big tax cuts on my fleet of lear jets. I mean, folks, if you can’t beat ’em – join ’em for Christ sakes!!! DON’T GET LEFT BEHIND!!!! 🙂

    Reply this comment
  4. Rogue Elephant
    Rogue Elephant 2 May, 2012, 10:30

    The Democrat strategy is to target college students and the poor for cuts (while protecting generous union contracts). Then, they blame the GOP for not raising taxes to help the Democrats’ victims. Simple.

    Reply this comment
  5. queeg
    queeg 2 May, 2012, 10:42

    Pratter…..let them pass it all and get it over and done.

    There is no money…..unfunded liabilities are far from new in California..

    Reply this comment
  6. Beelzebub
    Beelzebub 2 May, 2012, 11:23

    Did you read about Obama’s slogan for his 2012 campaign??? “FORWARD” HAH! 😀

    Taken right from the Nazi Germany slogan from 1940 “VORWARTS” (the german word for ‘forward’. 😀

    Come on, folks. I can’t make this crap up. I feel like I’m living inside Kurt Vonnegut paperback.

    Do what you can to save your families. Forget about the nation. It’s gone. Like John Lennon once said “The dream is over”. Go read the lyrics of that song called “God”. It’s making more and more sense every damn day. He was a prophet!

    Reply this comment
  7. Beelzebub
    Beelzebub 2 May, 2012, 11:27

    ‘God is a concept by which we measure our pain’.

    Reply this comment
  8. queeg
    queeg 2 May, 2012, 12:09

    Frightening and disturbing!””

    Reply this comment
  9. Beelzebub
    Beelzebub 2 May, 2012, 12:36

    mirror, dude, mirror!

    Reply this comment
  10. Katy Grimes
    Katy Grimes 2 May, 2012, 18:31

    Ten Assembly Democrats greatly helped Perez by spending $200,000 to print and mail fliers to 601,825 Californians. And guess why? Speaker Perez controls their budgets and provides the handouts–he giveth and he taketh away.

    Read about it here.

    And notice who mailed the most — Roger Dickinson, with 112,207 mailed.

    Katy Grimes

    Reply this comment
  11. Beelzebub
    Beelzebub 2 May, 2012, 18:47

    I would love to see Perez and Robert Rizzo in a hot dog eating contest. Now I would pay through the nose to see that one. The battle of the bulges. I bet together they could force Oscar Meyer to open up another production line.

    Reply this comment
  12. Beelzebub
    Beelzebub 3 May, 2012, 12:36

    Well, I see that the Cal State college faulty – coaches – prof’s – etc…. have voted to go on strike due to perceived unfair wages and/or working conditions. heh. Only they haven’t decided when to go on strike and may wait until the Fall semester. If I were gov I would fire all of them. But Clownboy will hold their hands and come to an agreement for a few slush fund or campaign donations. The students should be protesting their greedy faculty who are threatening their educations – before they protest Sactown.

    Reply this comment
  13. Ted Steele, CEO
    Ted Steele, CEO 5 May, 2012, 06:33

    Oh no— we can’t tax Calif. Businesses! Oh Noooooooooooooooooooooooo the job creatoooooooooors!!!

    Reply this comment
  14. queeg
    queeg 5 May, 2012, 14:35

    If taxing was so great and end all of end alls….answer…why…California ranks as one the top five of highest taxes in the country!!!

    It comes down to this…you spend your money or some union goon takes away from you by government force!

    Reply this comment
  15. Edward Rasen
    Edward Rasen 6 May, 2012, 09:43

    And a chicken in every pot. Perez is simply buying votes. He doesn’t give a damn about taxpayers or business owners. Governor Brown keeps yelling that the state is broke but the Democrats keep presenting schemes to increase the debt. Apparently, that is the Democrats game plan for winning control of the Assembly in the November election. Free school, free chickens, free food, taxpayer subsidized jobs, and of course a train to nowhere.

    Reply this comment
  16. Beelzebub
    Beelzebub 6 May, 2012, 10:55

    Tax leeches are human beings too! 🙂

    Reply this comment

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