SACRAMENTO, Calif. (CN) – With California State University trustees plotting to raise tuition for the first time in six years, a state lawmaker on Monday announced a plan to make state college free by taxing California millionaires.
Assemblywoman Susan Talamantes Eggman, D-Stockton, says a new 1 percent tax on income over $1 million would generate $2.2 billion annually, enough to cover tuition and fees for all in-state students at public universities and community colleges.
Eggman, who attended California State University, Stanislaus, and was an associate professor at California State University, Sacramento, calls her tax proposal “Renewing the California Dream.” Under Assembly Bill 1356, tuition and fees would be covered for all residents regardless of income.
“The cost of sending your kids to college has been rising faster than wages for the great majority of Californians,” Eggman said in a statement. “Too many families are caught in the middle of these opposing forces, and are unable to afford college for their children without taking on massive debt.”
The tuition-free plan comes one week after Eggman’s Democratic colleagues announced a $1.5 billion financial aid package that would create new scholarships and waive first-year tuition for community college students whose families make less than $150,000. Funding for the subsidy would come mostly from the state’s general fund.
Eggman’s plan differs as it would require not only approval by two-thirds of both statehouses, but also California voters. Revenue generated from the millionaire tax would be deposited into a higher-education assistance fund.
The recently re-elected Central Valley assemblywoman points to skyrocketing costs at public universities as inspiration for the new tax. Since 1969, median household incomes have increased 10 percent statewide, while tuition for the California State University system increased by 685 percent.
While Republican Assemblyman Rocky Chavez agrees that student debt is a pressing issue in California, he warns raising taxes alone won’t fix the state’s higher education woes. Chavez, who has been on the budget subcommittee for higher education for five years, says the millionaire tax won’t come close to covering in-state tuition costs at the state’s public universities and that it could drive businesses out of California.
Chavez’s numbers are backed up by the Legislative Analyst Office’s February review of Gov. Jerry Brown’s 2017-2018 budget proposal, which found the state is expecting $6.3 billion in in-state tuition fees from the 33 California State University and University of California campuses.
Eggman’s proposal would generate an estimated $2.2 billion annually, according to her office.
“This sells well to the millennials and the Bernie Sanders people, but it doesn’t reflect the economic reality,” Chavez said in a phone interview.
Eggman’s bill comes as Cal State trustees are scheduled to vote on a 5 percent tuition hike on Wednesday. The increase would raise individual tuition costs at the system’s 23 campuses by about $270 annually.
Chavez wants lawmakers and educators to find ways to cut roadblocks that prevent undergraduate students from graduating in a timely manner. He added that California colleges should incentivize students to take on heavier class loads, and that the average time it takes for UC and CSU students to graduate has spiked to 5.7 years.
According to a recent Public Policy Institute of California survey, most respondents oppose tuition increases while 82 percent supported new college scholarships and grants.
Assemblywoman Shirley Weber, D-San Diego, who attended UCLA and was a department chair at California State University, San Diego, said rising college costs hinder students from attending California’s “world-class higher education system.”
“I was a product of California’s promise of affordable higher education,” Weber said. “One of the drivers of California’s economy is our world-class higher education system; we need to think of affordable higher education as an investment, not a luxury.”