Pepperdine students might not notice their wallets lightening as a result of California’s budget compromise but a sales tax hike is one of several measures that will impact students regardless of their home state.
Prices will rise April 1 when the sales tax will inch upward by 1 cent per dollar to a total of 9.25 percent in Malibu.
California’s previous budget was passed in September months after the legal deadline but because of the economic downturn it immediately developed a projected $43 billion deficit for fiscal years 2009 and 2010. Gov. Arnold Schwarzenegger signed the new budget Friday Feb. 20 after legislators conceded several components including a proposed increase in the gas tax in order to win the vote of the six republicans needed to pass the budget. California is one of three states to require a two-thirds majority to pass a budget.
The compromise returns $87.5 million in Cal Grant funding that Schwarzenegger’s original budget would have cut from the state’s need-based financial aid program. Legislators also dropped the proposal that would have been most costly to students a 12-cent increase in the state gas tax.
The gas tax would have harmed students and the overall economy according to one student.
“I think that in a time where everyone is very conscious about gas taxes to increase the gas tax is one of the craziest things you could do said junior Chase Miller, a business major. Especially when everything right now depends on consumer confidence.”
The majority of legislators’ efforts to close the deficit took the form of service cuts borrowing and income tax increases. These will all play a hard-to-trace role in the lives of students from outside of California.
But students and local business owners said they will feel the higher sales tax.
“If you end up paying 1 percent more are you going to not buy a book?” asked John Evans co-owner of Malibu’s Diesel bookstore. “I don’t think so. All of these things (sales tax local factors) affect the business but so much of it has to do with consumer confidence. And this budget is hopefully a step in the right direction.”
Many Pepperdine students shop and work at Diesel located in the Cross Creek shopping center Evans said.
A popular item for many Pepperdine students the hardcover of the vampire romance “Twilight is marked $20. That means the final price with the new sales tax will be $21.85, 20 cents more than it costs after taxes now.
The seemingly small change is part of the tax’s effectiveness, according to Evans.
That’s how they get you he said. When people think about it they go ‘Oh it’s just 20 cents.’ But it adds up.”
Evans said he was unsure how the increased sales tax or other measures would directly impact his store which he said was hit hard by the sluggish economy and property taxes. Property taxes have increased recently as businesses bought properties for more than Evans said they are worth.
Sophomore Collin Cowart said he opposed the sales tax.
“They don’t have a sales tax where I’m from so that was one of the weird things about California said Cowart, an Oregon resident. It’s not what the price tag says. … And of course I’m not a fan of more taxes.”
Sales tax applies to most non-food items.
The sales tax increase will phase out June 30 2012 if voters approve a spending cap at a special election May 19. If that ballot proposition fails the tax will return to normal June 30 2011.
The budget also lowers funding for primary education state universities and most other state services.
Most students disapproved of the budget process overall.
“I feel that in general it’s pretty depressing said junior Grant Poliquin, who studied the California legislature at a seminar in Sacramento from Sunday, Feb. 23 to Tuesday, Feb. 24. It sucks that there’s not more bipartisanship involved and people can’t come to a happy compromise. I just feel that time will tell [whether the budget turns out well]. We’ll see down the line.”