California voters will decide in November whether to impose a one-time tax on the state’s billionaires, setting up an expensive and politically charged fight over how to pay for health care as federal cuts put pressure on Medi-Cal and other safety-net programs.
The Secretary of State’s office confirmed June 17 that supporters submitted enough valid signatures to qualify the initiative for the ballot. The measure is backed and financed by Service Employees International Union-United Healthcare Workers West, which argues California needs a major new revenue source to prevent hospital, clinic and health care workforce cuts.
Gov. Gavin Newsom, who has repeatedly resisted statewide tax increases, has already come out against the proposal. Some of California’s wealthiest technology and business figures are also funding efforts to defeat or weaken it, warning that the tax could drive billionaires, investment and businesses out of the state.
Newsom is reportedly trying to broker a last-minute agreement that would remove the measure before the November ballot is finalized June 25.
The initiative would apply a one-time 5% tax to California residents whose net worth exceeded $1 billion as of Jan. 1, 2026. Supporters estimate about 200 people would be affected. Those subject to the tax would be allowed to pay it over five years.
Supporters say the measure could raise $100 billion. Under the proposal, the money would be placed in a special fund, with 90% dedicated to health care and 10% set aside for education and food assistance. The Legislature would decide how to spend the money and could allocate as much as $25 billion a year to eligible programs, including Medi-Cal and CalFresh.
The measure would need a simple majority vote to pass.
SEIU-UHW, the state’s largest health care workers union, has put more than $31 million into the campaign. Union leaders say California’s health care system faces a severe funding shortfall after changes to Medicaid included in the federal tax and spending package signed last year by President Donald Trump, known as the “One Big Beautiful Bill Act.”
The law makes broad changes to Medicaid, the public health insurance program for low-income people and people with disabilities. Experts say new work requirements, shorter eligibility periods and limits on federal Medicaid spending are expected to reduce enrollment and cut funding to states. In California, Medicaid is known as Medi-Cal and covers roughly 14 million residents.
The state Department of Health Care Services previously estimated that federal cuts could cost California $30 billion a year. At the same time, state leaders have been dealing with budget deficits and rising program costs. Last year, Newsom and lawmakers limited Medi-Cal enrollment for low-income immigrants without legal status, and additional cuts are being considered as the state adjusts to new federal rules.
Miranda Dietz, director of the Health Care Program at the UC Berkeley Labor Center, has estimated that nearly 3 million Californians could lose health coverage over the next two years because of state and federal changes.
Union officials say the proposed billionaire tax is the only plan large enough to replace the money California stands to lose.
“We are facing literally a collapse of our healthcare system here in California and elsewhere,” SEIU-UHW President Dave Regan said when the campaign was launched in October.
Union spokesperson Renée Saldaña said voters who signed petitions were receptive to the proposal, with some saying they preferred a permanent tax rather than a one-time assessment.
“This is popular. The public is feeling the strain of their own healthcare costs,” she said.
The measure has been endorsed by Vermont Sen. Bernie Sanders and former U.S. Labor Secretary Robert Reich. Several local unions, along with the Teamsters and AFSCME California, have also backed it.
Opponents say the initiative is risky fiscal policy that could damage California’s economy and ultimately reduce revenue if wealthy residents move elsewhere. Newsom has long argued that tax increases on high earners could push both people and companies out of California. During a recent appearance on “Real Time with Bill Maher,” he said the state has “already seen dozens and dozens of people leave.”
The opposition has attracted major financial support from some of the state’s richest residents and former residents. Google co-founder Sergey Brin, whom Forbes estimates is worth about $300 billion, reportedly moved to Nevada because of the proposed tax. Brin has contributed $82 million to Building a Better California, a committee supporting several ballot measures that could undercut the billionaire tax if it passes. The committee itself has not taken a formal position on the tax measure.
Two of those countermeasures are also expected to appear on the November ballot. The Retirement and Personal Savings Protection Act would prohibit new state taxes on personal property, which could effectively invalidate the billionaire tax if both measures are approved. Another proposal, the Improving Transparency, Effectiveness and Efficiency in California Government Act, would require audits of state programs funded by special taxes.
Other wealthy business leaders, including former Google chief executive Eric Schmidt, Kleiner Perkins Chairman John Doerr and The Wonderful Company President Stewart Resnick, have donated millions to Brin’s committee. Ripple Labs co-founder Chris Larsen has launched another political action committee, Golden State Promise, to directly oppose the tax. Venture capitalist Ron Conway is funding a separate group called Stop The Squeeze.
Together, opposition committees had raised $107.9 million as of June 15, according to state campaign finance records.
Robert Lapsley, president of the California Business Roundtable, said opponents are especially concerned about language they believe would allow lawmakers to modify the tax after voters approve it. He said the Legislature could alter the tax rate, change how often it is collected or lower the wealth threshold for who must pay. The union disputes that interpretation.
The proposal has also drawn opposition from groups that might typically align with labor-backed health care funding efforts. Planned Parenthood and the California Teachers Association have opposed the measure, as have major health care organizations including the California Medical Association, the California Primary Care Association and the California Hospital Association.
Even if voters approve the initiative, it is expected to face court challenges. Legal questions could delay the state’s ability to collect or spend the money for years. Critics point to the measure’s retroactive design because it would apply to people who were California residents on Jan. 1, 2026, including those who later moved away. Supporters argue the proposal is legally sound.
Mark Peterson, a public policy professor at UCLA School of Law, said the revenue could significantly help California offset federal health care losses, but only if the measure survives lawsuits and efforts by billionaires to relocate or shield assets.
The debate is already being shaped by concerns over whether wealthy residents will leave. Fortune reported that six billionaires moved out of California last year before the tax could apply to them; their combined wealth could have generated an estimated $27 billion in revenue. Others, including Meta Chief Executive Mark Zuckerberg, reportedly moved after Jan. 1.
Still, there is no evidence that most of California’s roughly 200 billionaires are leaving. Some wealthy Californians, including former gubernatorial candidate Tom Steyer, have said they support the tax.
Early public polling shows the measure has support, but not by a wide margin. A UC Berkeley Citrin Center for Public Opinion Research-POLITICO poll found 50% of voters favor the initiative. At the same time, 54% said they were concerned wealthy residents would leave California, and 63% were concerned they would take businesses with them. A March UC Berkeley Institute of Government Studies-Los Angeles Times poll found 52% support.
Ballot measure campaigns generally prefer to begin with stronger early support because backing often declines as election day nears and opposition advertising increases.
For voters across Southern California and the Inland Empire, the measure is likely to become one of the most closely watched contests on the November ballot, pitting concerns over health care access and Medi-Cal funding against fears that another tax on high earners could weaken California’s economy.
Original source: CalMatters
