Dear Chairman Hatch, Chairman Brady, Ranking Member Wyden and Ranking Member Neal,
On behalf of the 480,000 students being served by the California State University (CSU) system, the California State Student Association (CSSA) writes to you today concerning the Tax Cuts and Jobs Act which now heads to Congressional Conference Committee for consideration. While the Senate bill, voted on last weekend, retains many critical benefits for students pursuing a higher education and those repaying their student loans—benefits that would be eliminated in the House version of the tax bill — we are still concerned about the potential impact this tax reform legislation will have on CSU students. In particular the following proposals would have the largest impact on students and graduates of the CSU system; the reduction in potential tax credits by consolidating the American Opportunity Tax Credit, Hope Scholarship and the Lifetime Learning Credit, a repeal of the Student Loan Interest Deduction for interest paid on federal student loans, and a repeal of the tax exempt status of graduate-level tuition waivers offered by universities.
Additionally, as drafted currently, both the House and Senate tax reform bills will exacerbate an already serious situation with respect to state investment in higher education. By limiting taxpayers’ ability to deduct all or part of State and Local Tax (SALT) deductions, states across the country, including California, will struggle to raise sufficient revenues to fund higher education and other critical public services. History has demonstrated that when states face significant budget strains or shortfalls, support for higher education oftentimes becomes a prime target. Any loss of state revenue would threaten state financial aid budgets which support critical programs such as the Cal Grant Program, and public university budgets which could push institutions to make difficult cuts to programs and raise tuition, raising the cost of attending college for students and their families.
Lastly, provisions within both the Senate and House tax reform bills, such as the revisions to the standard deduction may impact many CSU institutions’ ability to effectively raise revenues through private donations. By doubling the standard deduction for individuals and couples, we are concerned that less taxpayers will itemize and be less incentivized to donate to universities. Additionally, by eliminating tax-exempt private activity bonds (as included within the House passed bill), the cost to build new buildings on our campuses will become more expensive. Each of our 23 campuses across the CSU system is in desperate need for new and safe facilities. These changes may make these problems worse.
We strongly urge the Conference committee to negotiate a final conference agreement that does not include many of these tax code revisions that will negatively impact public higher education across the country as well as the hundreds of thousands of college students across the CSU system.
President, California State Student Association