Capitol Alert

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Assembly Speaker John A. Pérez's proposal to raise taxes on out-of-state firms for college scholarships is dead for the year, his office said Friday night after huddling with Gov. Jerry Brown and Senate President Pro Tem Darrell Steinberg.

The speaker wanted to tighten a corporate tax formula to generate $1 billion, most of which would go toward reducing tuition at California State University and the University of California. In a final-week struggle to win the necessary supermajority support, Pérez negotiated with Senate Republicans and moderate Democrats.

The proposed framework became unwieldy, sweeping in parts of other politically challenging proposals dealing with forestry regulations and Healthy Families coverage for lower-income families. Senate negotiators also sought exemptions for select companies, including tobacco firm Altria, according to sources.

Pérez officials would not verify which exemptions were in play but said the carve-outs had reduced the tax revenues too much in the end.

An hour before a midnight end-of-session deadline, a revival of Healthy Families appeared unlikely to pass on its own. A standalone lumber tax bill to pay for forestry regulatory activities and reduce wildfire liability also was in doubt.


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