Sun. Sep 25th, 2022

For Immediate Release: February 9, 2012
For More Information Contact: Carol Chamberlain – office: (916) 319-2069, mobile: (916) 804-5355



State Assemblyman Solorio Helps Unveil Middle Class Scholarship Program
Legislation will end unfair burden on middle class from rising public college fees

SACRAMENTO – State Assemblyman Jose Solorio (D-Anaheim) announced today that he is co-authoring new legislation to create California’s Middle Class Scholarship program. Introduced by Assembly Speaker John A. Pérez, the proposal is designed to keep more money in the pockets of middle-income families whose students attend the state’s public colleges and universities.

Chart above shows the steep savings on California public college fees a student would gain if the Middle Class Scholarship Program is implemented.

“If this legislation becomes law, all students attending California State Universities or the University of California with family incomes less than $150,000 will receive a Middle Class Scholarship that cuts fee costs by 2/3,” explained Solorio. “Middle Class Scholarships will make public universities and colleges affordable again, and will not affect low-income students who can continue to rely on Cal Grants and federal Pell Grants.”

Due to the national recession and chronic budget shortfalls, college fees have risen dramatically over the last decade. Since the 2003-2004 school year, CSU fees have increased 191 percent, UC fees have increased by 145 percent, and community college student fees have also increased significantly.

“California’s public colleges create tomorrow’s leaders,” continued Solorio. “This investment in our future will be covered by closing a tax loophole that only benefits out-of-state corporations.” The corporate tax adjustment will bring in $1 billion annually for the Middle Class Scholarship program.

For the CSU, it is estimated that approximately 150,000 students will receive the Middle Class Scholarship and save $4,000 per year. For the UC, it is estimated approximately 42,000 students will receive the Middle Class Scholarship and save up to $8,169 per year.

Community College districts will have local discretion to allocate $150 million to best meet their needs, including reducing fees, expanding the use of fee waivers, or providing grants to cover the costs of books or other educational expenses.

The Middle Class Scholarship legislation is contained in two bills. AB 1500 would eliminate the tax loophole and set up the fund, and AB 1501 would create the scholarship program. This legislation will require a 2/3 vote of the Legislature.

###

State Assemblyman Jose Solorio is the Chair of the Assembly Insurance Committee and also serves on the Assembly Appropriations and Transportation committees. He represents the Sixty-Ninth Assembly District, which includes the cities of Anaheim, Garden Grove, and Santa Ana. For more information about Assemblyman Solorio, visit www.assembly.ca.gov/solorio.

By Editor

Art Pedroza started Orange County's first political blog, the Orange Juice, back in 2003. He now publishes the top civic blog in Orange County - New Santa Ana, plus other blogs including New Anaheim, New Fullerton and the Irvine News Blog, as well as the OC Politics Blog.

9 thoughts on “Solorio trying to fund college scholarships by ending corporate tax loophole”
  1. All right here is one that interests me…So, instead of trying to reign in spending, we should increase taxes on multi-state corporations. The nifty thing about multi-state corporations is that they often have actual physical locations in other states, so they are more easily able to move locations and jobs to those other states who may be a little more tax friendly. They may not necessarily want to move, but they can if it meets with their overall plan.

    This “loophole” I believe was implemented by a vote a few years ago by Sacramento, tried to be repealed via a ballot measure (defeated), and tried to be repealed a few times again in Sac (no dice), so now our hearts are being torn by using the “its for the kids” message. By the way, I find that a “loophole” is any tax strategy, deduction, or calculation that someone else can use but not the one who is speaking of the topic. CA is not alone in single factor sales apportionment.

    Maybe I am wrong, but it does not seem that the UC & Cal State systems (especially UC) are actively in dire need of students to fill available spots. This generally means that there are ample students applying for the available spots- there are more applying than available. Demand greater than supply. Assuming that those who apply, are able to afford the tuition (summer jobs, parents, grandparents, scholarships, in college jobs, loans, etc…) it does not seem that this is needed. Would it be nice to reduce the cost- absolutely! Should we do it by adding a tax- not in my opinion.

    Perez’ website indicates that they would close “a tax break that only benefits big out-of-state corporations.” That is simply not true. Plenty of in-state companies have lots of employees and property in this state, but have few sales- these are companies that benefit from the single sales factor law. They generate revenue out of state, but employe and buy in state- that seems to be a good thing. I thought it was good to employ Californians and buy goods in CA thereby paying sales and property taxes.

  2. It is one thing to be straight up and ask for a tax increase, but it is another to be deceitful about it and say it will only impact large out of state corporations…simply not true. Again, if we could just get to “truth” it would be great.

  3. Just out of curiosity, I wonder how California’s community college tuition rates compare with other states around the country? If someone has access to this info, please share. This is the only reference I found:
    “Full-time tuition, based on two 15-unit semesters is about $600 -$5,400 per year, or an average of $2,361, according to the American Association of Community Colleges. California has one of the lowest per unit or per credit hour rates at $20 while the Community College of Vermont is at the top of the scale with a per credit hour cost of $180 for in-state residents.”

  4. Connie, good point and one that from growing up in another state, I have always felt like the CA Comm College system has been very affordable when comparing to other states. Not sure about national comparison, but here are two examples: Our local Santa Ana CC is at $540 for 15 units ($36/unit) while Spokane Community College (WA State) is at $1166 for 15 units (~$78/unit). Denver CO Comm College is at about $1588 for 15 units ($106/unit)- they also have almost $400 of additional fees not included in that.

    SACC would be almost 1/3 of the cost of Denve and about half the cost of Spokane.

    http://www.sac.edu/StudentServices/AdmissionsRecords/Pages/Fees-and-Refunds.aspx

    http://www.ccs.spokane.edu/Forms/District-Forms/Business-Office/Tuition/Tuition—fees/11_12-TuitionSch-070711.aspx

    http://www.ccd.edu/ccd.nsf/html/WEBB87LN3T-Tuition+Fees+Charts (click the excel file link)

  5. Stanley- I don’t care who it is coming from, lets just get there. Although, I know you feel differently, I don’t believe that financial illiteracy, lack of transparency, holding slanted stances, and lies of commission/omission discriminates.

  6. OK…about face on my interpretation of the press releases now that the bill was released. I had a case of premature interpretation.

    The bill would actually not eliminate the single sales factor but REQUIRE it. Essentially, this very well may encourage job location and physical locations in the state of CA. I have to rethink this as I was so worked up about them eliminating the single sales factor and this changes the whole game.

    Taxes would likely increase for companies who have lots of sales into the state, but do not have the employees working here or the property located here- this is why they are saying large out of state companies. It could actually encourage job creators to come to CA from other states that have a 3 factor formula (most usually double weight sales or something close). A company who has lots of employees and equipment here in CA but most of their sales to non-CA locations that they have an employee located in, may actually pay very little corporate income tax to CA. BUT, they would be providing JOBS (pers income tax, sales tax) for their employees and also pay sales and property taxes on their equipment and other property.

    Would this hurt local companies? It could hurt those who have some CA employees but most out of state (i.e. even telecommuters count), low capital expenditure type companies, who have most of their sales to CA. Even then, it could be marginal.

    Would it hurt CA economy from large companies? It could if they decide that they only will sell tangible personal property here in CA and not have ANY employees, inventory, equipment, etc…here. Kind of the Amazon model, although I believe that the bill will try to expand what it means to be doing business in CA. The danger is that a company would pull all of its employees out of the state but continue to sell here but no longer pay any income tax.

    Still not convinced that all the savings should just go to UC/CalState/CC, but at least there seems to be light out there…

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.