Half of the legislation that makes up the California Middle Class Scholarship Act passed in the state Assembly Wednesday.
Assembly Bill 1501, which passed in a 54-to-15 vote, establishes the Middle Class Scholarship Program, which would cut fees for middle-class UC and CSU students by two-thirds and would also reduce fees at the California Community Colleges.
Its partner bill, Assembly Bill 1500, would close the single sales factor tax loophole that allows out-of-state corporations to choose their tax rates, with the additional taxes collected funding the program. The second bill must pass the legislature in order to provide the necessary funding for the program.
According to the author of the act, state Assembly Speaker John Perez, D-Los Angeles, the loophole currently drains $1 billion out of California each year.
“With the collapse of our economy, we’ve made our colleges and universities more expensive and less accessible,” Perez said in a video on the scholarship act website. “The Middle Class Scholarship Act intends to turn that around.”
Assembly bill 1500 has been met with opposition from companies such as Chrysler, General Motors, International Paper and Kimberly-Clark. The companies’ coalition, California Employers Against Higher Taxes, claims the bill would add $1 billion in taxes for businesses that provide jobs to middle-class Californians, according to the coalition’s website.
On May 2, the UC Student Association called for a boycott of products manufactured or supplied by out-of-state companies in protest of the coalition’s efforts against AB 1500.
Darius Kemp, director of organizing and communications for the association, said the association is happy with Wednesday’s outcome and will keep pushing for the act to appear on Gov. Jerry Brown’s desk as soon as possible.