Tricky politics in Assembly speaker's middle class scholarships

3:42 PM, May 30, 2012   |    comments
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It was a rare moment of bipartisanship Wednesday afternoon in the California Assembly -- an agreement to create $1 billion in new scholarships for college students from middle-class families.

Trouble is... there's no such deal on how to pay for it.  And therein lies the strange politics ahead, especially in an election year.

AB 1501, a proposal championed by Assembly Speaker John Perez, garnered 55 votes in the lower house, slightly above the two-thirds majority it needed.  That tally included four Republican assemblymembers, and thus the bill now heads to the state Senate.

But now, the catch.  AB 1501 is linked -- not legally, but fiscally -- to AB 1500, Speaker Perez's plan to fund the scholarships for students whose families earn no more than $160,000 a year.

And that's where things are far less hugs and kisses.

AB 1500 would eliminate a hotly debated business tax break, one that allows large corporations to lower their tax bill by choosing whichever of the tax formula that costs them the least.  That tax break was created in 2009 as part of one of the last bipartisan state budget deals under the Capitol dome.

"If we are to restore prosperity and opportunity for every Californian," said Perez, "we need to ensure that higher education remains accessible and affordable."

And no doubt the four GOP assemblymembers who voted for the scholarship bill agree.  But set aside the policy goal here and examine the raw politics, and you've got some interesting questions.

For starters, why didn't the tax bill (AB 1500) come up for a vote? Because it's written as an 'urgency' measure, the legislation isn't subject to this week's pass-the-house-of-origin-or-die rule that's causing such a legislative frenzy at the state Capitol.

A spokesman for Speaker Perez says given that there's more time, the tax companion bill wasn't fast tracked (though Wednesday's was also an 'urgency' measure and thus could have waited).

Still, Perez clearly sees a greater political value to the scholarship package -- especially if, as expected, the taxes fail to get bipartisan support by the end of the legislative session on August 31.  After all, Democrats could then easily criticize GOP legislators on the campaign trail this fall as being more interested in protecting big business than helping middle-class kids.

Passage of the plan to actually create scholarships, one could argue, helps his cause... because it now forces a showdown on the taxes.

But Republicans who voted for the AB 1501 scholarships clearly see things differently.  A spokesperson for one of them --Assemblywoman Kristin Olsen, R-Modesto -- says Olsen agrees that students need more financial assistance but thinks a different funding source needs to be found, even if means additional cuts in programs Democrats like.

In other words, the GOP play on the issue may be this: if Democrats really care about the kids and not just politics, they'll work to find the money from somewhere that both parties can support.

Both strategies would have merit, it seems.  And the issue is full of both political payoff and peril.  Higher education cuts have been deep in the last few state budgets, and students have angrily protested higher fees and fewer classes.

The costs of college have real salience in the electorate, and large corporations aren't exactly warm and cuddly.  But Democrats have their own reputation as being anti-business, and voters rejected a 2010 initiative that also attempted to roll back the business tax break in question.

In the chess game that is Capitol politics, this one's a good one.


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