Middle Class Scholarship Act would have aided struggling middle-class students, is rejected by state Senate

Mayra Escobedo

September 21, 2012

An assembly bill that would have provided funding for a middle class scholarship and which would have saved 42,000 UC students $8,169 and 150,000 CSU students $4,000 annually, was rejected by the state Senate.The Middle Class Scholarship Act, written by Assembly Speaker John A. Perez, consisted of two bills, AB 1500 and AB 1501. In order to have the middle class scholarship, both bills needed to pass the senate and be approved by Gov. Jerry Brown.AB 1500 would have funded the scholarship by proposing the closing of a tax loophole, but was rejected by the Senate on Sept. 1 because it was unable to get the two-thirds majority vote it needed for approval. Instead it only received 22 votes in favor and 15 against it.

“We had worked extensively to make sure that we promoted the bill and were really relying on the senators,” said Angelica Salceda, University of California Student Association president. “Unfortunately at the late hour they didn’t stand with students and it’s incredibly disappointing to middle-class students.”

The Middle Class Scholarship was created by AB 1501, which also went to the Senate for approval. However, without AB 1500 to provide funding, it also died on the Senate floor.

“Today was an opportunity for the State Senate to join the Assembly in approving tax fairness for California businesses and college opportunity for middle-class families,” said Assembly Speaker Perez in a statement.

“Unfortunately, even though most Senate Democrats supported the Middle Class Scholarship Act, we could not reach agreement with Senator Lou Correa (D-Santa Ana) or Senate Republicans that would achieve the two-thirds vote necessary.”

The scholarship would have reduced tuition fees by two-thirds for CSU and UC students from families with household incomes of up to $150,000 and community colleges would receive $150 million in funds that could have been used to best meet their needs, such as fee waivers or grants, according to the Middle Class Scholarship website.

“If the bill was enacted, commencing with the 2012-13 academic year, all (qualifying) resident undergraduate students enrolled at the CSU and UC would be given a scholarship award that combined with other financial aid would cover at least two-thirds of the student’s mandatory systemwide fees,” said Stephanie Thara, CSU spokeswoman.

For Zoraya Guillermo, 29, a junior majoring in sociology as well as a middle-class student, the passing of the bill would have eased her financial situation since she doesn’t qualify for FAFSA because of her family income and has had to take out student loans.

“It’s really crappy because (senators) are obviously well off so they don’t have to worry about paying for their kids’ tuition,” said Guillermo.

The closing of the tax loophole from AB 1500 would have changed a corporate tax code that gives out-of-state businesses that do business in California two options in how they calculate taxes. One formula allows corporations to factor in sales, property and payroll. The other option is to only factor in sales.

The revision in the tax code would have required out-of-state corporations to only use the formula that factors in sales. Closing this tax loophole would have generated an estimated $1 billion that would have provided the funding for the scholarship, according to a 2010 report made by the California Legislative Analyst’s Office.

Miles Nevin, executive director of the California State Student Association, said that despite the act being a top legislative priority to the CSSA, he wasn’t surprised when the act didn’t pass because he knew that Republicans wouldn’t jump on board.

According to Nevin, CSU students would have greatly benefited from the scholarship had it been approved before negotiations started chipping away at the it.

“The passing of the act would have made a significant impact because it would have provided vital resources to students that really got hit by cuts,” he said.

Rich Copenhagen, president of the Student Senate for California Community Colleges, expressed disappointment with the senators’ unwillingness to side with students.

“We’re very disappointed with the senators that took the side of out-of-state businesses and didn’t provide the much needed aid to community college, UC and CSU students,” said Copenhagen. “And that constituents that should be supporting the infrastructure of the state decided that it was more important for out of state businesses to make money than making college and universities accessible and affordable.”

Gilbert Hernandez, 19, a junior mechanical engineering major who considers himself a middle class student, said that the passing of the bill could have helped him out with expenses such as paying for books.

“It’s very disappointing because I can’t think of a reason why the senators wouldn’t fully support it. They should put themselves in students’ shoes,” said Hernandez.

Both AB 1500 and AB 1501 had passed the assembly with two-thirds bipartisan votes.