Estuardo Mazariegos graduated this spring from Cal State Dominquez Hills, but with $18,000 in debt after a dozen years struggling to juggle work and paying for college.
Contrast his experience with a previous generation of Californians. Between 1968 and 1975, Dariel Garner attended both undergraduate and graduate school at UC Berkeley for free. He became an entrepreneur and within several decades had amassed a fortune of more than $100 million.
How was that free education possible? One reason: California used to tax the estates of its wealthy residents.
But in 2001, Congress reformed the federal estate tax — paid exclusively by multi-millionaires and billionaires — and cut states out of a "piggy back" arrangement that had existed since the 1920s. Prior to 2001, California's share of federal estate tax revenue was almost a $1 billion a year.
Other states moved to retain their own estate taxes, including Washington, which dedicated revenue to a trust fund for K-12 and higher education. Oregon, Hawaii, New York, Minnesota, Massachusetts and 13 other states also took action.
But not California.
By failing to restore its estate tax, California lost an estimated $18 billion in potential revenue between 2003 and 2016, according to a new report I helped research for the Institute for Policy Studies. Over this same period, average in-state tuition and fees for California public colleges and universities went up nearly 70 percent, adjusted for inflation.
Meanwhile, state support declined and costs rose for students and their families. Average student debt for graduates of public colleges and universities rose 17 percent after accounting for inflation.
The California College for All campaign, a coalition of student groups and education advocates, argues that restoring a state estate tax would generate more than $4 billion a year, paid exclusively by about 4,000 multi-millionaires and billionaires. This could provide life-changing reductions in the cost of public higher education for the 2.5 million students at the 146 Cal State, University of California and community college campuses.
The campaign is advocating for its plan at the Legislature, with an eye towards a potential initiative on the 2020 ballot.
As part of the recent Republican tax cuts, Congress doubled the amount of wealth exempted by the federal estate tax -- to $11 million for an individual and $22 million for a couple. So acting at the state level could capture some of this lost revenue.
Michigan, Ohio, Arizona, and Florida are also looking at restoring their estate tax to put college back in reach for millions nationally. The average student debt is more than $37,000. Let's restore the formula that gave past generations a virtually free education for today's students.
Chuck Collins is coauthor of the new Institute for Policy Studies report “Restoring Opportunity: Taxing Wealth to Fund College for All in California.” He can be contacted at Chuck@ips-dc.org.