Bill could offer tax credit for middle-income families’ college expenses

In an effort to combat the rising cost of tuition at California public universities, legislation that would offer a tax credit for students from middle class families was introduced in the state assembly last week.

If signed into law, the bill would give a $500 tax credit for college-related expenses to students who attend the University of California, California State University or one of the state’s community colleges and come from families earning $80,001 to $140,000 annually.

State Assemblymember Jim Beall, D-San Jose, who authored bill, said it is targeted at people who are caught between the lower income level needed to qualify for scholarships and the higher income level that would allow them to easily afford the cost of tuition.

“It won’t cover their entire costs, but it’s a positive step in the right direction to put more cash in the pockets of the working middle class,” Beall said.

Among the the many efforts to making higher education in California more affordable, Beall’s bill differs from other plans — such as those advocated by Gov. Jerry Brown and the ASUC, UC Berkeley’s student government body — as it would lower taxes rather than raise them.

“(The bill) does take a different approach than the legislation we have been advocating,” said ASUC External Affairs Vice President Joey Freeman in an email. “However, I am excited to see additional proposals to make higher education more affordable and accessible.”

Brown and the ASUC have advocated for increasing state revenues and funding for the UC in order to lower the tuition so that more students can attend college.

Beall’s bill, on the other hand, lowers taxes to help people pay for the cost of attending college without trying to reduce the price tag of a college degree.

But the viability of such a proposal has come under question by some because it lacks revenue increases.

“A tax break, however progressive, leads to lost revenue,” said Jeremy Pilaar, chief deputy of state affairs for Freeman, in an email. “If the past several rounds of budget negotiations are any indication, given Republican opposition to taxes, lost revenue will translate to further deep cuts in other programs that affect the working class, such as public K-12 education, welfare, health, and senior services.”

No formal budgetary analysis has been conducted on the bill nor does the legislation specify how the state will account for lost revenue, but Beall said he expected the bill to have “minimal fiscal impact.”

The bill’s strongest advantage over affordable higher education efforts that seek to increase taxes may lie in its ability to circumvent some of the historical political perils that come with those efforts. Under state law, bills that look to increase taxes need a two-thirds majority to be turned into law. Since Beall’s legislation asks for a tax reduction, it only needs a simple majority.

Still, Beall remained somewhat cautious about his bill’s chances of being passed.

“It’s going to be a tough battle,” he said.

The bill will first be eligible to be read before committee on Feb. 4.

Curan Mehra covers higher education.