Some ASUCD members are not happy with the five cent tax increase to all ASUCD commercial units‘ credit card transactions, excluding Sodexho.
The fee would charge every ASUCD commercial unit an extra 4.56 cents for all plastic credit card transactions, including the ASUCD Coffee House, the UC Davis Bookstore, Campus Copies and the Aggie Student Store.
The Sodexho Company, which is in charge of places like the Dining Commons and the Silo, is exempt from the fee because it is not one of the 170 UC Davis merchants.
The charge is being implemented by the University Rate group – responsible for review of all proposed rates applicable to all campus departments – without student consent or representation.
“This is without a doubt, flat-out, taxation without representation,” said Jack Zwald, ASUCD senator. “That’s entirely un-American. And Sodexho, a private corporation, is entirely exempt which puts student jobs and the student industry at a great disadvantage when you compare it to a private company that doesn’t have to pay this tax.“
Zwald presented Senate Resolution 25 to the senate at the meeting on Apr. 16. The resolution, which opposes the “disproportionate burden placed on ASUCD commercial units by the University Rate group,” passed unanimously.
ASUCD Business Manager Mark Champagne was informed of the increase through e-mail after the group had already voted on approving the rate.
“It impacts ASUCD disproportionately hard,” Champagne said. “One, because it does so many little transactions and two because Sodexho doesn’t have to pay it.”
Champagne gave the example that if someone were to purchase $400 worth of books on a credit card, the charge to the Bookstore would be 4.56 cents. The same charge however, would be given to the Coho when a student uses their credit card to purchase a cup of coffee for $1.40. That transaction of $1.40 would cost the Coho 4.56 cents, which can add up.
Champagne, along with director of the Coffee House Sharon Coulson, estimated that this increase would cost the Coho about $30,000 extra in fees, making it the largest amount of any campus unit.
Michael Allred, associate vice chancellor of finance and controller and member of the University Rate Group, calculated the fee’s impact differently.
“While credit card transactions are often a convenient form of payment, operating as a credit card merchant brings with it significant responsibilities,” said Allred in an e-mail interview. “The cost of meeting some of those responsibilities is being charged to the merchant departments through the credit card rate.“
The cost of supporting the credit card system is subsidized in part by Accounting and Financial Services and the central campus. The remainder falls to the merchants themselves, Allred said.
“While ASUCD does represent a large portion of the merchant base at 30 percent, the projected cost for ASUCD equates to $17,410,” he said.
Allred said that Accounting and Financial Services are open for student input.
“[We] would not be opposed to this suggestion and would welcome student feedback,” he said. “Additionally, the group is already comprised of all, or nearly all, campus department representatives.”
Allred said the reasons for this rate increase are to provide security.
The rate has been in effect since Jan. 1 and the University Rate Group approved it on Jan. 23, though Zwald didn’t learn of it until roughly two weeks ago.
“They’re raising our prices and our taxes while at the same time letting other people skate,” Zwald said. “What we would prefer to see is a system based on a more progressive rate system, where we made say $3 million, and [the Bookstore] made $19 million, then we split it based on income not based on transactions.”
ANGELA RUGGIERO can be reached at firstname.lastname@example.org.