California State University Chancellor Timothy P. White, along with University of California President Janet Napolitano and California Community Colleges Chancellor Eloy Ortiz Oakley, urged House and Senate conferees to protect higher education tax benefits in a letter Dec. 8, 2017, highlighting the impact of graduates across all economic sectors.
Dear Conferees:
As you negotiate final Tax Cuts and Jobs Act legislation, we write to highlight the
priorities of California’s public higher education institutions, including protecting
higher education tax benefits and deductions for students and families, supporting
provisions that encourage charitable giving, preserving existing categories of tax-exempt
bond financing, and maintaining the state and local income tax deduction.
Together, the University of California (UC), California State University (CSU) and
the California Community Colleges systems serve more than 2.5 million students and
employ a combined 300,000 employees across 147 campuses, helping to drive our
state’s, and the nation’s, economy. Our three systems consistently provide an
outstanding return on federal investments in our students, institutions, and
research. More than 330,000 students graduated from our institutions last year,
prepared to enter the workforce across all economic sectors. Many were first-generation
and low-income. To achieve this kind of success, we depend upon federal
tax provisions that support our students, help us attract and retain top-flight faculty
and other employees, and maintain our infrastructure.
We appreciate the Senate bill’s maintaining an array of tax benefits that encourage
promising students, especially from lower- to moderate-income households, to pursue
higher education. These include the American Opportunity Tax Credit, the Lifetime
Learning Credit, the Hope Scholarship Credit, the Student Loan Interest Deduction,
Income Exclusion of Tuition Waivers (including Section 117(d) Qualified Tuition
Reductions) and Employer-Provided Tuition Assistance. We urge you to retain
existing higher education tax benefits for California’s students and families in any
final legislation.
Our institutions depend greatly on charitable contributions to help make higher
education accessible to millions of students across California. We are concerned that
the current proposal in both bills to increase the standard deduction for tax filers,
without including an incentive for the majority of Americans who do not file itemized
tax returns to engage in charitable giving, could have a significant negative impact
on charitable giving to our institutions. We therefore support inclusion of an “above
the line” charitable deduction, which would allow itemizers to subtract their
charitable contributions from their taxes, before choosing whether to file itemized or
non-itemized returns.
We are also concerned that both bills would repeal Advance Refunding Bonds, while
the House’s bill would additionally repeal Private Activity Bonds. These tax-exempt
bonds are critical tools used by our institutions to fund capital projects, including
classrooms, training facilities, housing complexes, and hospitals, which will serve
students, faculty and staff, as well as patients, and we ask that these classes of tax-exempt
bonds be maintained in any final agreement.
The State of California provides critical support to our success, including through the
generous, need-based Cal Grant Program, which makes college possible for over
300,000 Californians each year. We are concerned that scaling back the state and
local taxpayer (SALT) deduction will undermine revenues that provide such public
services in California, especially across the entire education continuum. Both the
Senate and House bills would end the deductibility of state and local income taxes,
and allow taxpayers to deduct only up to $10,000 annually in property taxes. Our
institutions encourage the conferees to further restore the SALT deduction to allow
for taxpayers to deduct state and local income taxes in addition to property taxes,
which is especially important to taxpayers in our state.
Thank you for your consideration. If you have questions about UC’s position on the
House and Senate Tax Cuts and Jobs Act legislation being conferenced, please
contact UC’s Interim Associate Vice President for Federal Governmental Relations,
Chris Harrington, at Chris.Harrington@ucdc.edu; at the CSU, please contact
Assistant Vice Chancellor for Federal Relations Jim Gelb at jgelb@calstate.edu; and
at the California Community Colleges, please contact Vice Chancellor for External
Relations, Laura Metune, at lmetune@CCCCO.edu.
Yours very truly,
Janet Napolitano,
President,
University of California
Timothy P. White,
Chancellor,
California State University
Eloy Ortiz Oakley,
Chancellor, California Community Colleges