Bill would cut tuition by closing corporate loophole

Last year, Gov. Jerry Brown, a Democrat, tried to pass a single-sales requirement through the Legislature, but his measure failed to get GOP support in the Senate. This time, a coalition of corporations is lobbying against Perez’s plan, say it will hurt middle class jobs.

Chrysler, General Motors Corp., International Paper, Kimberly-Clark Corp. and Procter & Gamble Co. have formed a coalition called California Employers Against Higher Taxes. The group has done little more than build a website so far, but spokesman Peter DeMarco said residents can expect more activity in the months ahead.

The California Chamber of Commerce also opposes the plan on the grounds that it might make California less hospitable to business, but did not include the act on its highly-watched list of “job killers.” Two other proposals also are taking aim at the corporate tax loophole this year.

An initiative proposed for the November ballot would close the loophole and dedicate a portion of the additional revenue to clean-energy projects. Separately, the “Keep Our Promises Act” by Sen. Mark DeSaulnier, D-Concord, would use the additional revenue to bolster veterans’ services.

Senate Republicans are upset about what they see as an attempt by Democrats to undo a previous budget deal. They also say Democrats are trying to create conflict between college students and outside corporations.

“I don’t see any support on it. It’s a billion dollar tax increase, and it’s unnecessary at this time,” said Senate Minority Leader Bob Huff, R-Diamond Bar.

Perez’s legislation has strong support from Senate President Pro Tem Darrell Steinberg, D-Sacramento, who has introduced a bill to lower the cost of college textbooks. Perez said he is confident that the urgent need to increase access to higher education will help him muster the few GOP votes required to get the act to the governor’s desk.

“When all of this is done, my colleagues are going to be more motivated to help middle-class students than they are to create a tax loophole for out-of-state-corporations,” he said.

Perez has been touring campuses throughout California to promote the scholarship legislation. Last week, he told more than 100 students packed into a room at California State University, Sacramento that the act would face a “struggle” in the Senate and that he would need their help.

Among the attendees was Benjamin Brumer, a 20-year-old sophomore who said he has taken out $50,000 in loans to finance his education.

“I need the scholarship just to get through the next two years,” said Brumer, whose parents are high school teachers in Davis. “I’m part of the group that will support the economy.”