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Thu08062020

Last updateMon, 20 Apr 2020 1pm

Like most college students, Bianca Rojas has a lot to balance—classes, papers, exams, research and so on.

Unlike most of her peers, the 25-year-old California State University, Long Beach, sociology major also has two extracurricular obligations: Jasper and Adeline, her toddlers.

Each semester, she said, she carefully budgets her financial aid, calculating the credits she can afford, given the needs of her family. It’s stressful: Last semester, she and her partner, a student at Cal Poly Pomona, had to at times take turns skipping classes to tend the children.

“I had to seek counseling because I was just overwhelmed,” Rojas said. “It was a really difficult time, because it was just not enough resources available. You find out too late, like, ‘Oh there’s not going to be childcare for you at this time.’ It’s like then what do you do? Not go to school?”

Gov. Gavin Newsom had students such as Rojas in mind this year when he injected millions of dollars into the state higher education budget to increase financial aid for young parents attending state and community colleges and universities in California

More than 300,000 California students are supported by the state’s main financial aid program, known as Cal Grant; last year, about 32,000 of them were also parents. Newsom’s budget, among other things, increased awards up to $6,000 for UC, Cal State and community college students with children, promising “real relief to our parents who are getting an education at the same time.”

But high demand and administrative delays have slowed that relief, and made it clear that more work remains to improve state aid for so-called “nontraditional” students. Those students—who are completing degrees later in life as opposed to right after high school—have become a policy focus as California seeks to boost college-graduation rates amid a projected shortfall by 2030 of 1.1 million bachelors-degree-holding workers.

Students with children “are increasingly becoming the norm,” said David O’Brien, director of government affairs for the California Student Aid Commission, which administers Cal Grants. “It’s why the Student Aid Commission is at the forefront of an effort to modernize California financial aid to better serve the needs of the student of today as opposed to what was the traditional student of 30 or 40 years ago.”

So far this year, the state has discovered at least two areas that need improvement. For one, the allocation of the additional grant money is structured in a way that still makes it hard for students with children to qualify. The state guarantees Cal Grants for eligible students attending college right out of high school, but aid for nontraditional students comes out of a more-limited grant pool.

In the 2017-18 budget year, only 25,750 competitive grants were available for the more than 340,000 qualified applicants, according to a report by the California Budget and Policy Center. Newsom’s appropriation this year increased the number of competitive grants to 41,000, but the demand still exceeded 300,000—meaning the new money for nontraditional students is still comparatively hard to get. 

The grant money for parents has also been delayed by procedural glitches, according to state officials.

“We hope to have the initial round of grants distributed by this November or December,” O’Brien said. “That’s just sort of a slight delay due to the rollout of the new program, (and) the programming of the awards into our legacy system, which we’re in the process of upgrading.”

Students have already received their standard grant awards; if they qualify, they will also get the first portion of the increased access award when the Student Aid Commission rolls it out. After this semester, the awards will be disbursed along with the regular schedule of Cal Grants and other aid the commission administers, O’Brien said.

Rojas said that while it’s great that the money will be available to student-parents during the holidays—a time she says can be stressful financially—getting it earlier would have been even more beneficial.

“It could’ve been helpful if we had it from the beginning. That, way people would feel a little bit more relaxed with how we are going to be able to budget to complete school,” Rojas said, noting that finances at the start of a semester often determine how many units a student takes.

“If there’s actually aid that could help you get through a whole semester full-time without having to work, that’s golden,” she said. “But if not, then you’re over here thinking, ‘I’m going to take less units, so it’s going to delay graduation.’ It’s like a domino effect.”

Transferring to CSULB from Cerritos College last semester wasn’t easy, said Rojas, but she did it, because she wants to continue taking care of her family and believes getting her four-year degree will help. She and her partner, Jose Yat, who live in a garage apartment behind his parents’ home in the Los Angeles suburb of South Gate, had to take out loans for the first time while going to school this year. Yat also decided to stop working to make time to finish school and help care for 1-year-old Jasper and 2-year-old Adeline.

They eventually were able to get childcare off-campus this semester, but Rojas said she wished she’d known more about available resources for student-parents. She said she did not know about the increase in aid, and neither did other students she knew at CSULB and Cerritos College.

“I just feel like there’s not enough information of what else they can provide for student-parents,” Rojas said. “It’s just kinda like, ‘Go through CalWORKS; get on welfare; go through all that.’ … I appreciate that, but what about scholarships for us? What about additional financial aid? I’m happy to hear that, finally, someone thought about us, because I feel like we’re kind of just in the corner.”

Robert Shireman, a senior fellow at The Century Foundation, a progressive, nonpartisan think tank, seconds the need for more outreach. Last April, the foundation released a report recommending sweeping changes in the state’s financial aid system, including better communication and less complexity.

Shireman, whose focus is education policy, says the amount of assistance needs to be gradually ramped up, too, to about $2 billion per year in grant aid for low-income students.  

“We are hoping and working to encourage a budget next year that has a much larger increase in investment in Cal Grants to address the gaps that we’re seeing,” he said. “First of low-income parents, but also other low income students as well.”

CalMatters.org is a nonprofit, nonpartisan media venture explaining California policies and politics.

Published in Local Issues

California’s resistance began before there was a resistance.

When Gov. Jerry Brown unveiled his final budget on Jan. 10, it bookended eight years of a progressive march to reduce greenhouse gases, expand health care, grant more rights to undocumented immigrants and raise the minimum wage to $15 an hour. Along the way, voters have assented by passing temporary taxes on the rich—not once, but twice. The top marginal income tax rate is now 13.3 percent, the highest state income tax rate in the country.

In short, policies that are now labeled acts of resistance to President Donald Trump were alive and ascendant in California long before Trump won the White House. But the contrasts have become much more stark.

Instead of cutting taxes, the Democratic governor and his party’s legislative leaders have passed a gas tax to help pay for aging infrastructure. Instead of trying to shift government out of the healthcare marketplace, California is looking for a way to fund single-payer health care, including coverage for undocumented immigrants. Instead of criminalizing pot, the state is looking forward to collecting taxes on marijuana sales.

In the months between now and the June deadline for a final budget, the governor and the Legislature will hammer out details. The focus this year: what to do with an expected surplus of $6.1 billion—and there are definitely differing opinions all around. Republicans say return it to California’s 40 million residents as a nice tax refund. The governor's priority is to fill up the state’s rainy-day fund. Democratic legislators mostly want to spend it.

“We have a very different approach,” said Assemblyman Phil Ting, D-San Francisco, who chairs the Assembly Budget Committee. “Our focus, the people who we think need tax relief, are the working Californians who are making less than $25,000. That’s where we want to spend our money, making sure they have money to pay rent, to pay for food.”

Rather than giving out “huge corporate tax breaks and a huge tax break for the wealthiest in this country,” Ting has a long list of how he would like to spend that extra money, including:

• Increasing the state’s Earned Income Tax Credit, which puts money into the hands of the working poor.

• Expanding Medi-Cal health care for poorer Californians to cover all remaining uninsured residents, mostly undocumented immigrants.

• Expanding early education for 4-year-olds through preschool and transitional kindergarten programs.

• Increasing college aid.

• Expanding mental and social services to reduce the number of criminals who go on to re-offend.

As supportive as Brown might be of these Democratic aspirations, his administration is urging legislative leaders to proceed with caution. The state’s tax structure is more vulnerable than ever to the stock market gains and losses of its wealthiest citizens, and the governor said California must prepare for the next economic downturn, because a mild recession could wipe away at least $20 billion a year in revenues.

He also warns of uncertainty from Washington, D.C.

“There are certain policies that are radical departures from the norm, and California will fight those, whether it’s immigration or offshore drilling,” Brown said. “We don’t know what will happen. I wouldn’t want to portray a California-Washington battle, although there are some key differences, and we’ll espouse our values.”

Since Brown was elected to begin his second stint as governor in November 2010, the state has climbed out of the recession and enjoyed economic prosperity. The unemployment rate, which topped 12 percent, now stands at 4.6 percent. Since his return, California has added 2.4 million jobs, and hourly wages are up $4.76 an hour. The state, which carried a $25 billion deficit in his first year back, has enjoyed billion-dollar surpluses in recent years, and the state now has a rainy-day fund.

The governor’s proposed $190 billion budget is dominated by spending on education (29 percent) and health care (32 percent). Health care spending has been growing particularly fast since the state embraced the Affordable Care Act, also known as Obamacare. The act not only grew the marketplace for private health plans; it allowed states to expand their Medicaid health insurance programs for the poor.

Because California is among 30 states that expanded Medicaid, the federal government is paying at least 90 percent of the cost for newly eligible enrollees. That has allowed California to draw billions in extra funding from the federal government to bolster Medi-Cal, the state’s version of the national Medicaid program. As a result, the number of people without health coverage in the state has dropped to a historic low: from 17.6 percent in the 1980s to 7.6 percent in 2016. Today, one in three Californians is covered by Medi-Cal.

Public schools too have greatly benefited since the recession, with much of the extra spending on schools going to improve teachers’ salaries.

However, if the federal government doesn’t reauthorize the Children’s Health Insurance Program for 1.3 million children, that could add more than $850 million in costs to the state over two years.

Worse, if Republicans in Washington slash Medicaid funding in 2018, the state could lose between $25 billion and $50 billion, said Chris Hoene, executive director of the California Budget and Policy Center, a progressive think tank in Sacramento.

“The reality is California could not afford the scale of the cuts the GOP has been proposing,” Hoene said. “That’s going to put state leaders in a position of deciding who gets state services and how do they fund that.”

Other factors are straining the budget. For example, pension costs for public workers continue to be one of the fastest-growing liabilities—driven by lower investment-rate assumptions, higher health care costs and longer life spans.

Voters, too, could turn on Brown and lawmakers. Early polling suggests Republicans have a decent shot at repealing a gas tax hike that went into effect late last year. Brown said at a press conference Wednesday that he believes a repeal initiative could be defeated.

The Legislature’s nonpartisan budget analyst is also urging lawmakers not to commit to too many new spending programs.

“As it crafts the 2018-19 budget and future budgets, we encourage the Legislature to consider all of the uncertainty faced by the budget in future years and continue its recent practice of building its reserve levels,” the analyst wrote.

On the flipside, Republicans are calling for a tax refund, if not an outright repeal of state income taxes. They argue that California’s high taxes chase residents out of state.

“This surplus is a direct result of Capitol Democrats overtaxing hard-working Californians,” said Assemblyman Matthew Harper, R-Huntington Beach. “Rather than expanding an ever-growing list of government programs, our leaders should figure out a way to return that money to the people who earned it in the first place.”

Assemblyman Vince Fong, R-Bakersfield, said he plans to introduce tax cuts aimed at helping families and small businesses stay in California.

“As we see all too often now, we are losing families and small businesses to neighboring states that have tax burdens much lower than California’s high-priced tax code,” Fong said on Twitter. “We have an opportunity to change that.”

Brown dismissed the refund idea, saying it would only prompt service cuts to public schools and universities later. “If you want to budget responsibly, you need big surpluses in years that are good,” he said.

Still, there’s a growing sentiment that California may have to respond to recent changes in the federal tax plan, specifically a $10,000 cap on state and local deductions that will hit millions of households.

According to the state Finance Department, the average deduction for state and local income taxes alone is nearly $16,000 per return, while state and local property taxes average less than $6,000 per return. Because a portion of those taxes will no longer be deductible, it acts as double taxation for California taxpayers.

Senate President Pro Tem Kevin de León, who is running for U.S. Senate, introduced legislation Thursday to shield Californians from bearing the costs of the tax overhaul. The bill, dubbed Protect California Taxpayers Act, would allow taxpayers to make charitable deductions to the state and receive a dollar-for-dollar tax credit on the full amount of their contribution. By having residents donate to the state government as a charitable contribution, the contribution remains deductible on federal taxes.

“The Republican tax plan gives corporations and hedge-fund managers a trillion-dollar tax cut and expects California taxpayers to foot the bill,” de León said in announcing his legislation. “We won’t allow California residents to be the casualty of this disastrous tax scheme.”

Brown was particularly vocal against the GOP tax proposal, calling it a “tax monstrosity,” but the governor expressed reservations about whether the state could sidestep federal law.

“It looks interesting,” Brown said. “But two questions: Can it work? If it does work, can the Internal Revenue Service issue a regulation and completely subvert it?”

De León responded that he was confident it would work, because similar charitable deductions have already been given out for education-based contributions.

For now, state Democrats are in agreement about a common threat.

Whether it’s federal tax changes or entitlement cuts, the leader of the Assembly, Anthony Rendon, D-Paramount, said he’s most concerned Republicans in Congress and the Trump administration will take another swipe at liberal California in 2018. “We’re worried about the next shoe to drop.”

CALmatters is a nonpartisan, nonprofit media venture explaining California policies and politics.

Published in Politics