Proposition 40 would place a 5 percent tax on the fortunes of California’s roughly 200 billionaires, with most of the resulting revenue earmarked for healthcare programs. Backers call it a long-overdue reckoning for the state’s wealthiest residents. But the measure’s path to passage is anything but straightforward, tangled up in union infighting, competing ballot initiatives and a leadership scandal that has handed opponents a ready-made talking point.

The measure is the brainchild of the Service Employees International Union-United Healthcare Workers West, yet it has drawn opposition from several other major labor organizations — an unusual alignment that puts unions on the same side as the billionaires Prop. 40 targets. Adding to the turmoil, Dave Regan, the union’s outspoken president, is facing serious misconduct allegations from fellow SEIU leaders, who say an independent probe substantiated claims of bullying, harassment, intimidation and even physical violence. Those officials have called for his resignation, saying their union must hold true to its values around respect and accountability. Regan has denied the accusations, but the controversy has become a liability for the campaign as it fights to win over skeptical voters.

Even if Proposition 40 clears the ballot, its future isn’t guaranteed. Wealthy interests opposing the tax have placed two rival measures before voters: Proposition 41, which would bar new taxes that exceed the state’s existing spending cap, and Proposition 42, which would prohibit any tax on personal property. Under California’s rules, if multiple conflicting measures pass, only the one receiving the most votes takes effect. That means a strong showing for either Prop. 41 or Prop. 42 could effectively cancel out the billionaire tax, regardless of how Prop. 40 fares on its own.

A recent survey from the Public Policy Institute of California illustrates just how tight the race has become. Support for Prop. 40 stood at 52 percent among likely voters, with 46 percent opposed — a margin narrow enough that either outcome remains plausible. Meanwhile, both rival measures showed slim leads of their own in the same poll. Notably, those surveyed were given only the official ballot summaries, without any explanation of how the three measures might interact or cancel each other out — a wrinkle that could catch many voters off guard once they’re filling out their ballots.

Mail voting is set to begin within weeks, giving campaigns on all sides a short window to sway an electorate that appears genuinely split.

Absent from the fray, at least publicly, is Gov. Gavin Newsom. Before Prop. 40 even qualified for the ballot, Newsom had voiced concerns that a wealth tax could push high-income residents and businesses out of California, potentially hurting a tax base that already relies heavily on the state’s top earners for income tax revenue. Since then, though, he has softened his stance, suggesting that taxing extreme wealth is better addressed at the federal level rather than through a single state’s ballot measure. Political observers note that Newsom’s shift may reflect his own ambitions beyond Sacramento — a potential presidential run makes alienating the progressive wing of his party over billionaire taxation a risk he seems unwilling to take, even as he stops short of endorsing Prop. 40 outright.

With labor unions divided, competing tax measures on the same ballot, and a scandal complicating the campaign’s messaging, Proposition 40’s fate looks likely to hinge on which side can cut through the noise and reach voters before ballots start arriving in mailboxes.

Original source: CalMatters

The post California’s Millionaire Tax Faces New Hurdles as Proposition 30’s Future Hangs in Balance appeared first on The Hemet & San Jacinto Chronicle.

The survey of more than 1,100 likely voters found 52% in favor of the measure and 46% opposed — a margin close enough to fall within the poll’s statistical margin of error. Complicating matters further, the same poll found narrow majority support for two competing measures backed by tech billionaires that would effectively cancel out Prop. 40 if both pass.

Proposition 40 would levy a one-time 5% tax on the wealth of roughly 200 California billionaires, with proceeds intended to help cushion the state’s Medi-Cal program against deep federal funding cuts. The initiative, championed by a healthcare workers union, has created an unusual rift within the labor movement, pitting some unions and progressive groups against each other.

In response, a coalition of wealthy tech industry figures placed two rival measures on the ballot. Proposition 41 would prevent new state tax measures — like Prop. 40 — from bypassing California’s constitutional spending limits, and drew support from 51% of likely voters polled. Proposition 42 goes further, seeking to prohibit any new state taxes on property or personal assets altogether; that measure earned 54% support.

Under California’s constitution, when two conflicting ballot measures both win voter approval, only the one with the higher share of “yes” votes takes effect. That means even if Prop. 40 passes, it could be nullified if Prop. 41 or Prop. 42 receives more support.

Both Gov. Gavin Newsom and the two major candidates hoping to succeed him — Democrat Xavier Becerra and Republican Steve Hilton — have come out against the billionaire tax measure. The poll also showed Becerra maintaining a commanding lead over Hilton in the governor’s race.

Prop. 40 isn’t the only tax-related question facing Inland Empire and Southern California voters this fall. Proposition 3, which would lock in a higher income tax rate for the state’s top earners, drew 58% support in the poll. Meanwhile, Proposition 43 — which would raise the vote threshold required for local governments to approve new taxes — appears to be trailing, with 51% of respondents opposed.

Voters also leaned against a Republican-backed measure that would require government-issued identification at polling places, with 55% opposed, while several bond measures on the ballot drew majority support.

Perhaps the most unified sentiment in the entire poll had nothing to do with any single measure: Nearly 80% of respondents said they believe there are simply too many propositions cluttering this year’s ballot.

Voters looking for more guidance on the November election can consult CalMatters’ voter guide online, and the organization is hosting a series of community discussion events across the state, including sessions this week in San Francisco and San Diego, with a Riverside event planned for later this month focused on election security in the Inland Empire.

In other Sacramento news this week, an oversight report revealed troubling spending patterns at California’s High-Speed Rail Authority, including nearly $40 spent on a luxury rideshare for a trip of less than a mile, gym visits billed as work travel, and repeated flights between Denver and California for vague “executive team” meetings. Investigators flagged more than $685,000 in questionable travel reimbursements paid to outside consultants between 2024 and 2026, including expenses tied to nightclubs, cigar lounges and escape rooms. Assembly Republican leader Alexandra Macedo of Visalia criticized the spending as wasteful.

Separately, state Senate leader Monique Limón of Santa Barbara closed out her first year as Senate president pro tem having kept her Democratic caucus unified on several fronts, including negotiations over liability protections for local governments facing child sexual abuse lawsuits and a wildfire cost-reduction plan that ultimately stalled after Newsom and Assembly Speaker Robert Rivas intervened at the last minute.

And earlier this week, Newsom signed nearly 50 new bills into law, including first-in-the-nation standards for testing and cleaning up smoke damage in homes affected by wildfires — a response to concerns raised after major blazes, including the Eaton Fire that tore through the La Cañada Flintridge area in January.

Original source: CalMatters

The post Poll Shows Californians Divided Over Proposed Tax on Billionaires appeared first on The Hemet & San Jacinto Chronicle.

At the center of the rush is Proposition 43, a statewide measure that would reverse a 2020 California Supreme Court decision and require that citizen-initiated tax measures — those placed on local ballots through petition drives rather than by city councils or county boards — win two-thirds voter approval, the same threshold already required for taxes proposed directly by government bodies.

The court’s earlier ruling held that initiative-driven tax measures needed only a simple majority to pass. That decision opened the door to a wave of local tax proposals, many backed by public employee unions, since the lower bar made passage far easier. Now, with tax-limitation groups pushing Prop. 43 onto the November ballot, local officials and union-backed campaigns are racing to get their own tax measures approved before the rules potentially tighten.

Beyond that political calculation, local sales tax hikes face another obstacle: a state cap limiting local sales taxes to no more than 2 percentage points above California’s base rate of 7.25%, capping most areas at 9.25% total. The Legislature, however, routinely grants exceptions. Gov. Gavin Newsom last week signed Senate Bill 762, which allows 10 cities, two counties and one town to exceed that ceiling — not just for this election, but through 2031. The exemption applies even to tax measures placed on the ballot through voter initiatives.

These jurisdictions will join a growing roster of California communities already taxing above the standard cap. In the Inland Empire and greater Los Angeles region, Lancaster and Palmdale currently have the state’s highest combined sales tax rate, at 11.25%. A legislative analysis of SB 762 warned that other cities could soon approach similarly steep rates.

That same analysis acknowledged a long-standing critique of sales taxes: they disproportionately burden lower-income residents, who tend to spend a larger share of their earnings on taxable goods. The California Taxpayers Association raised similar concerns in opposing the bill, arguing that piling on more local sales taxes runs counter to state leaders’ promises to ease California’s high cost of living.

With so many tax measures crowding local ballots this fall, scrutiny is also turning to how public agencies promote them. State law bars the use of taxpayer funds for campaign advocacy, but the boundary between neutral public information and persuasive messaging is often blurry — and enforcement by the state’s Fair Political Practices Commission is inconsistent.

Last week, the commission determined that Nevada County had improperly spent nearly $35,000 on mailers urging residents to support a 2022 sales tax increase. The county was fined $31,500, though that penalty will also be paid using public money. Notably, the tax measure in question failed, receiving only about 48% support — meaning the improper campaign spending would not have overturned the outcome even had it passed.

A similar controversy is now unfolding in the Bay Area, where a proposed regional sales tax hike aimed at raising roughly $1 billion annually for public transit has drawn a legal challenge. Critics allege that the official ballot language plays up the benefits of the tax while downplaying its cost, and warns of service cuts if voters reject it. Opponents have asked a Santa Clara County judge to order revisions to make the wording more neutral.

The dispute is only the latest chapter in a long-running debate over how California’s local governments seek — and sometimes stretch the rules to secure — voter approval for new taxes.

Original source: CalMatters

The post California Cities Race to Put Tax Hikes on Ballot Before New Voter Restrictions Take Hold appeared first on The Hemet & San Jacinto Chronicle.

At the center of the debate is Proposition 40, a measure that would impose a 5% tax on the personal wealth of California’s roughly 200 billionaires, with the bulk of the money earmarked for healthcare programs. If approved, it would mark the first wealth tax of its kind anywhere in the country, a distinction that has already drawn national scrutiny. Supporters and opponents alike expect that a “yes” vote would trigger years of courtroom battles, along with renewed pushes to bring similar wealth taxes to other states — and potentially to Washington.

Observers have compared the measure’s potential reach to Proposition 13, the landmark 1978 property tax measure that sparked tax revolts across the country. Not since then has a single California ballot initiative carried the potential to reshape tax policy on a national scale the way Prop. 40 might.

The financial stakes have attracted heavy spending from both sides, not just on Prop. 40 but also on two related measures, Propositions 41 and 42. Those two measures were placed on the ballot by wealthy opponents of the billionaire tax as a kind of insurance policy, designed to blunt its effects should it pass.

Two additional measures, Propositions 3 and 43, revive older fights over taxation that have simmered for years.

Proposition 3 shares ideological DNA with Prop. 40, built on the premise that California’s wealthiest residents should continue carrying a disproportionate share of the tax load to keep public services funded. The state’s income tax system already leans heavily on high earners, who generate the majority of California’s income tax revenue. Back in 2012, facing a budget crisis, then-Gov. Jerry Brown and voters approved a temporary surtax on top earners to help close the gap. Brown pledged the surtax wouldn’t last forever, but a coalition of public employee unions — led by the California Teachers Association — later pushed through an extension that kept it alive through 2030.

Proposition 3 would make that surtax permanent, generating anywhere from $5 billion to $15 billion annually depending on economic conditions. Legislative allies and Gov. Gavin Newsom gave the measure a boost by placing it near the top of the ballot, though some union officials worry that the high-profile clash over Prop. 40 could overshadow — or complicate — support for Prop. 3.

Proposition 43 represents the opposite philosophy, echoing the tax-limiting spirit of Prop. 13 from nearly 50 years ago. In 1996, voters approved Proposition 218, which extended Prop. 13’s two-thirds vote requirement to “special taxes” imposed by local governments for specific purposes. For years, it was widely assumed that same two-thirds threshold applied to special taxes proposed through citizen initiatives as well.

That assumption unraveled in 2017, when the California Supreme Court, ruling in a case involving a local marijuana tax, hinted that initiative-driven special taxes might only need a simple majority to pass. The ambiguity set off years of legal confusion and conflicting lower court decisions. The matter appeared settled in 2020 when the state’s high court declined to review an appellate ruling that exempted citizen-initiated tax measures from the two-thirds requirement.

Since that decision, hundreds of special tax measures — largely local sales taxes — have passed with simple majority support, and dozens more are currently in the pipeline. Proposition 43 would undo that precedent, restoring the two-thirds vote requirement for these initiative-based taxes. It’s the latest in a string of attempts by anti-tax advocates to reverse course on the issue, following an earlier effort that the state Supreme Court itself blocked from the ballot in 2024.

This year’s version of the measure was originally far more expansive, but a last-minute compromise scaled it back. Under the deal, tax-limitation advocates agreed to narrow the measure’s scope in exchange for lawmakers abandoning a competing proposal that would have imposed a two-thirds vote requirement on anti-tax measures themselves.

Whether Prop. 43 finally puts this decades-long dispute to rest remains to be seen. Given California’s long history of tax fights, it seems safe to assume this won’t be the last chapter in the ongoing debate over who should pay — and how much.

Original source: CalMatters

The post Voters Face Billions in Tax Decisions Across Five California Ballot Measures appeared first on The Hemet & San Jacinto Chronicle.

Proposition 43 would raise the bar for passing local tax measures from a simple majority to a two-thirds supermajority. Supporters argue it restores the intent of a decades-old constitutional amendment that courts have since reinterpreted. But critics, including Sonoma City Councilmember Sandra Lowe, say the measure would hand disproportionate power to a small minority of voters, making it far harder for cities and counties to fund basic services like fire protection, law enforcement and emergency medical care.

Lowe, who also serves on the oversight committee for Sonoma County’s Measure H, points to her own community as a cautionary example. Approved by voters in 2024, Measure H established a half-cent sales tax to bolster wildfire prevention and emergency response in one of California’s most fire-prone regions. The measure passed with nearly 62% support — a solid majority, but short of the two-thirds threshold Proposition 43 would require.

Thanks to that funding, Sonoma County has been able to launch round-the-clock emergency medical teams, expand vegetation management to reduce fire danger, respond more effectively during flooding events, upgrade fire engines and safety gear, adopt new firefighting technology, and roll out community education efforts. Lowe argues that none of those improvements would exist today had Proposition 43 already been in place.

“Public safety is typically the largest share of any local government budget,” Lowe said, noting that fire, police and sheriff’s services form the backbone of what residents expect their local governments to provide. She pointed to recent disasters — including the fires that devastated Altadena and Pacific Palisades, along with Sonoma County’s own history of wildfire emergencies — as evidence that climate-driven catastrophes are no longer rare exceptions but a recurring reality Californians must be prepared for.

Lowe warns that Proposition 43 wouldn’t just threaten future funding measures — it would have blocked recent successful ones elsewhere in the state. She cites Alameda County’s 2025 healthcare funding measure and Santa Clara County’s June measure to preserve open space as examples that likely would have failed to meet a two-thirds requirement, despite winning majority support from voters.

The core objection, Lowe says, comes down to a basic democratic principle. Local elections, policy decisions and construction approvals are all typically decided by majority vote. She argues that carving out an exception for taxes — requiring a supermajority instead — effectively allows a minority of voters to override the will of the majority, undermining the democratic process itself.

If passed, Lowe cautions, Proposition 43 could trigger a wave of service reductions across California, from slower emergency response times to cuts in ambulance and fire crew availability. She believes the long-term consequence would be a state less equipped to handle natural disasters and public safety threats, even as such challenges become more frequent and severe.

“Majority rule is the foundation of our democracy,” Lowe said. “We shouldn’t be moving away from that now.”

The measure will appear before voters on the November ballot alongside other tax-related questions that could significantly influence California’s fiscal future. Supporters of Proposition 43 contend it simply reinforces protections against unchecked tax increases, while opponents like Lowe see it as a direct threat to the ability of local governments to serve their communities effectively.

Original source: CalMatters

The post Proposition 43 Would Limit Local Governments’ Power, Critics Warn of Minority Rule in California appeared first on The Hemet & San Jacinto Chronicle.

Proposition 45 would loosen environmental review requirements and limit public input on a broad range of projects, from freeway widenings to power plants and mineral extraction sites. Critics argue the measure hands developers and corporations far more control over what gets built and where, while stripping away the checks that communities — particularly those already burdened by pollution — depend on to protect their air, water and health.

For Inland Empire residents living near warehouses, freight corridors and industrial zones, the stakes are not abstract. Southern California communities have spent years pushing back against the health impacts of nearby logistics hubs, refineries and heavy industry. Advocates warn that Prop. 45 could make it significantly harder for local officials to impose the kinds of conditions that have historically softened those impacts — things like altered truck routes, stronger air filtration systems or requirements to control polluted runoff.

At the center of the debate is the California Environmental Quality Act, widely known as CEQA. The decades-old law requires developers to study and mitigate the environmental harm their projects may cause before construction begins. Supporters of the law say it has served as one of the few real tools available to residents fighting to keep hazardous facilities away from schools, hospitals, parks and homes.

Opponents of Prop. 45 argue the measure would effectively hollow out CEQA’s protections for a wide swath of development — not just housing, which supporters of the initiative say is the primary target of reform. Legal analysts have noted that other large-scale developments, including data centers and warehouse facilities, could also benefit from the loosened rules, even though they aren’t explicitly named in the measure.

Beyond limiting community input, the proposition would also grant developers new legal standing to sue government agencies that attempt to impose additional environmental safeguards. Critics say that provision could discourage cities and counties from pushing back on harmful projects altogether, out of fear of costly litigation.

There are also financial concerns. The nonpartisan Legislative Analyst’s Office estimates that Prop. 45 could cost the public more than $100 million annually in its early years, with the long-term fiscal impact potentially growing even larger. Opponents argue that taxpayers — not the corporations backing the measure — would ultimately bear the burden of mitigating pollution that a full environmental review might have prevented.

Adding to concerns from opponents is a clause that would make future changes to the law extremely difficult. Under Prop. 45, state lawmakers could only amend the measure with a two-thirds vote, and only if the changes were found to “further the purposes” of the original initiative — a bar critics call nearly impossible to clear.

More than 270 organizations, including environmental justice groups, labor unions, civil rights advocates and public health organizations, have come out against the measure. They argue that at a time when federal environmental protections are already being rolled back, California cannot afford to weaken one of its strongest remaining tools for safeguarding public health.

Supporters of the measure contend that California’s housing crisis and infrastructure needs demand faster permitting and fewer regulatory roadblocks. But for many communities across the Inland Empire and beyond that have spent years fighting the health consequences of industrial development in their backyards, opponents say the tradeoff is too steep — and the cost, ultimately, could fall on the residents who can least afford it.

Voters will decide the measure’s fate at the ballot box this November.

Original source: CalMatters

The post Prop. 45 Threatens Clean Air Protections and Public Oversight in California appeared first on The Hemet & San Jacinto Chronicle.

Proposition 40 would impose a one-time 5% tax on Californians whose covered assets exceed $1 billion, with the revenue directed toward healthcare and other public programs. Two related measures, Propositions 41 and 42, are also on the ballot and would reshape how such taxes could be structured and reviewed in the future.

Thomas argues that California’s identity has long been built on wagering on what comes next — from the rise of semiconductors and personal computers to breakthroughs in biotechnology, clean energy, quantum computing and artificial intelligence. That culture of innovation, he writes, doesn’t just produce successful companies; it fuels job growth, broadens economic opportunity and generates the tax revenue that supports schools, healthcare and the state’s broader safety net.

That’s precisely why he believes Prop. 40 poses a serious risk. While the need for more healthcare funding is real — especially with Medi-Cal facing new budget gaps and living costs climbing across the state — Thomas contends this particular measure is the wrong tool for the job.

He points to projections from the nonpartisan Legislative Analyst’s Office, which estimates Prop. 40 could generate tens of billions of dollars in revenue in its early years. But that windfall, he warns, would likely be short-lived. The same analysis suggests California could see hundreds of millions of dollars or more in lost income-tax revenue annually going forward, if high-net-worth residents choose to relocate rather than absorb the tax.

That tension, Thomas argues, is the central flaw in the measure: it swaps steady, long-term revenue for a one-time boost. Once that initial money is spent, the state could be left with a permanently smaller tax base to fund essential services in the years that follow.

Beyond dollars and cents, Thomas raises concerns about where entrepreneurs and business leaders choose to build their companies. Founders and executives make decisions about where to grow, hire and invest — and California benefits when those leaders stay rooted here. The state’s continued dominance in tech and innovation, he notes, isn’t guaranteed; other states and countries are actively courting entrepreneurs with their own incentives.

A particular sticking point, according to Thomas, is that Prop. 40 would effectively tax the estimated value of businesses and ideas before they generate any actual profit or are sold. That structure, he says, doesn’t reflect how many innovative companies actually operate. A biotech firm might spend a decade developing a single drug with no guarantee of success. A clean-energy startup could require years of investment before turning any profit. Under Prop. 40, founders in these situations could face enormous tax bills tied to paper value they haven’t yet converted into cash.

Thomas is careful to note that he’s not arguing against taxing the wealthy altogether. He acknowledges that California already taxes wages, business income, dividends and capital gains, and that those who have benefited most from the state’s success should help sustain the institutions that made that success possible.

That’s why he’s urging voters to instead support Propositions 41 and 42. Prop. 42, he explains, would bar the state from creating new taxes based purely on ownership of financial assets, business interests or intellectual property, and would prevent certain taxes from applying retroactively. Importantly, it wouldn’t stop California from taxing income or realized gains — it would simply draw a clearer line between taxing what someone actually earns versus what they merely own on paper, giving business leaders more predictability as they plan where to grow and hire.

Prop. 41, meanwhile, would require greater transparency and auditing around special tax measures, helping voters better understand how new taxes would function and whether the programs they fund are actually delivering results.

Thomas’s ultimate argument is that California doesn’t have to choose between remaining a global innovation leader and maintaining strong public services — the two, he says, are deeply connected. In his view, Prop. 40 offers a short-term fix that risks driving away the companies, jobs and tax revenue California depends on for the future. Props. 41 and 42, by contrast, offer what he calls a steadier path built on accountability and predictability.

Original source: CalMatters

The post Proposed Billionaire Tax Could Boost Short-Term Revenue but Threaten California’s Long-Term Growth appeared first on The Hemet & San Jacinto Chronicle.

Erica Olivo Reynoso, a licensed vocational nurse at Kaiser Permanente’s Los Angeles Medical Center and a member of SEIU-United Healthcare Workers West, said she has watched the toll of rising healthcare costs play out firsthand among her patients — from seniors who skip basic screenings to expectant mothers rushing to use up benefits before they disappear.

“The fear in the halls of our hospital is palpable,” Olivo Reynoso said, describing what she calls the early stages of a healthcare crisis in California.

She points to last year’s federal budget package under President Donald Trump, which cut roughly $100 billion in healthcare funding to the state. According to Olivo Reynoso, those reductions threaten coverage for more than a million Californians and could push insurance premiums to double for millions more. She said hospitals and clinics across the state are already responding with layoffs, service cuts and closures.

Her prescription for the problem is Proposition 40, known widely as the California Billionaire Tax, which would appear on this fall’s ballot. The measure would impose a one-time 5% tax on the wealth of the roughly 200 Californians worth more than $1 billion. Backers estimate it could generate about $100 billion for healthcare, in part to offset federal cuts, along with funding for public schools and food assistance programs.

Olivo Reynoso argues the tax targets a small slice of the population that collectively holds an estimated $2 trillion in assets — much of which, she says, currently escapes taxation because of loopholes benefiting the ultra-wealthy. Without the additional revenue, she warns, patients may struggle to afford medications, emergency rooms in some areas could close permanently, and remaining facilities could face even greater strain from staffing shortages.

“This isn’t about dollars and cents; it’s about life and death,” she said.

Complicating the picture are two competing measures, Propositions 41 and 42, placed on the same ballot by opponents of the billionaire tax. Olivo Reynoso contends both measures are designed specifically to unravel Proposition 40 rather than to accomplish their stated goals involving tax audits or retirement savings.

She noted that funding for the opposing measures includes significant contributions from Google co-founder Sergey Brin, who recently became the world’s third-richest person. Olivo Reynoso argues that spending underscores her point — that a handful of billionaires are working to protect their fortunes at the expense of the state’s healthcare safety net.

Having gathered signatures for the measure across Los Angeles, Olivo Reynoso said she frequently heard from residents anxious about their ability to afford care. Her message to them, and to voters generally, is that the ballot offers a chance to act: support Proposition 40, and reject Propositions 41 and 42.

Business groups and other opponents of Proposition 40 have offered a different perspective, warning that the tax could discourage investment and innovation in California, potentially undermining the very revenue streams that fund the state’s safety net programs.

Original source: CalMatters

The post Rising Health Care Costs Are Squeezing Californians — Taxing Billionaires Could Help Keep Coverage Affordable appeared first on The Hemet & San Jacinto Chronicle.

Since the start of the year, he has called for cracking down on corporate investors buying up single-family homes — an idea that has found support from both socialist lawmakers and President Donald Trump. Last month, after failing to keep a billionaire tax measure off California’s November ballot, he pivoted to pitching a national tax on the ultra-wealthy instead. And just last week, speaking before a gathering of Latino policymakers in Los Angeles, he warned that artificial intelligence threatens to upend the American workforce and called for “democratizing” the economy in response.

The shift comes as Newsom, term-limited and widely expected to run for president in 2028, positions himself ahead of what could be a defining national conversation about wealth inequality and AI’s disruption of jobs.

“The old bargain is dead, and AI is going to finish it off,” Newsom told the crowd, referring to the once-common expectation that a working-class job could support a family. “We need to wake up to that foundational reality.”

It’s an unfamiliar role for a governor who has never been known as a populist and who has maintained close ties to wealthy tech donors — many of whom strongly oppose Proposition 40, the state’s billionaire tax measure headed to voters this fall. Throughout his time in Sacramento, Newsom has cultivated an image as a mainstream progressive: supportive of higher taxes on top earners and an expanded safety net, but wary of full-throated redistribution politics. He has resisted most new tax proposals and defended corporate tax breaks that many on the left have wanted eliminated for years.

By zeroing in on AI’s economic fallout, Newsom appears to be staking out a signature issue for a potential presidential run. Whether voters embrace his proposed remedies remains an open question.

“Newsom is balancing two pressures,” said Kevin Liao, a Democratic strategist who worked on billionaire Tom Steyer’s unsuccessful “tax the rich” campaign for governor this year. “There’s a desire to meet the demands of his constituents and the current appetite to be against billionaires, and to address the massive wealth inequality in the state and the country, with the cold political reality that much of his career and presumably his future ambitions have also been built on the financial support of a lot of wealthy folks in Silicon Valley.”

**Multiple tax measures crowd the November ballot**

Back home, Newsom’s vocal opposition to Proposition 40 could create confusion for California voters, who will find several competing tax measures on their November ballots.

Proposition 3, backed by the California Teachers Association, would make permanent the state’s higher income tax rates on the top 2% of earners — money that flows into the general fund, with roughly 40% going toward public schools. Voters first approved those higher rates in 2012 under then-Gov. Jerry Brown and extended them again in 2016. Should they expire as scheduled in 2030, the state could lose between $5 billion and $15 billion annually.

Early polling suggests Prop. 3 has broad support, but CTA President David Goldberg acknowledged that campaigning for it will be complicated with a competing tax measure also on the ballot. The union opposes Proposition 40 in part because its revenue would largely fund healthcare rather than education.

Voters will also weigh in on two additional tax-related measures backed by tech billionaires aimed at undercutting Prop. 40, along with a separate measure from an anti-tax group that would make it harder for cities to raise local taxes.

“It’s always hard when you have a bunch of things” on the ballot, Goldberg said. “It is going to mean that we have to really go out there and make the case for this.”

Asked whether his opposition to the billionaire tax could complicate support for Prop. 3, Newsom told reporters, “I hope that’s not the case. … It’s a legitimate question.”

**A carefully managed image**

For years, Newsom has pushed back against California’s reputation as a high-tax state, often arguing on national platforms — including Fox News — that lower- and middle-income residents actually pay more in taxes in states like Texas and Florida once sales and property taxes are factored in. His argument draws on research from the left-leaning Institute on Taxation and Economic Policy, which found that states without income taxes rely more heavily on regressive taxes that hit lower earners harder.

“He taxes low-income workers more than we tax millionaires and billionaires in the state of California,” Newsom said of Florida Gov. Ron DeSantis during a televised 2023 debate hosted by Sean Hannity.

Critics counter that such comparisons ignore the substantially lower cost of housing and goods in those states.

“California is a high-tax state,” said Jared Walczak, a senior fellow at the right-leaning Tax Foundation. “A state like California can get away with higher rates than some other states because the state has so much to offer. … It doesn’t mean there isn’t a tipping point.”

As his tenure winds down, Newsom continues to point to programs made possible by California’s tax structure — free school meals and subsidized child care among them. At the same time, he frequently urges legislative Democrats not to be “profligate” with spending, and he touts the fact that he has never raised broad-based taxes during his eight years in office, even as critics note he has trimmed corporate deductions and, just this month, signed a law raising taxes on health insurance plans.

When lawmakers have pushed new revenue proposals amid budget shortfalls over the past three years, Newsom has consistently blocked them.

“We have among the highest tax rates in the United States of America for high-wage earners, we have among the highest tax rates … for corporate taxes,” he said in 2024. “I feel strongly that we have to live within our means.”

This year, some Democrats sought to tax corporations whose low-wage employees rely on public healthcare programs; Newsom agreed only to have the state study the idea further.

**A political balancing act**

His stance on the state billionaire tax follows a similar pattern. Alongside allies such as Planned Parenthood, Newsom argues that ultra-wealthy Californians could simply relocate their assets elsewhere — as Google co-founder Sergey Brin and others have already done. Yet early polling shows a narrow majority of Californians favor the measure.

Newsom reportedly pressed SEIU United Healthcare Workers West to abandon the initiative in exchange for concessions. When that effort failed, he shifted his focus toward a federal wealth tax proposal, echoing ideas long championed by progressives such as Sen. Elizabeth Warren.

His federal plan calls for a minimum tax on incomes above $100 million, reversing 2017 corporate tax cuts, raising inheritance taxes, and closing loopholes that allow wealthy individuals to borrow against unrealized capital gains without paying income tax. He has also voiced support — without offering specifics — for a public fund that would use AI-generated wealth to help displaced workers.

Sacramento-based Republican strategist Rob Stutzman said the pivot risks looking inconsistent to voters.

“He’s never banged this drum … he’s a big spender but not a big taxer,” Stutzman said. “This whole jiu-jitsu he has to do to oppose the [billionaire] tax in his state and then support it federally, it doesn’t sound as authentic as others might sound on the soapbox at the Iowa State Fair.”

**AI anxiety cuts across party lines**

Newsom’s populist rhetoric also opens him to attacks from Republicans eager to tie Democratic tax proposals to broader accusations of socialism.

“Most Democrats have the foresight to tie their tax hikes to a far-left policy, but Newsom just wants to take your money because he wants to take your money,” said Nicholas Poche, a spokesperson for the Republican National Committee, accusing the governor of trying to appeal to both progressives and establishment Democrats simultaneously.

Still, strategists note that anxiety over AI’s economic impact resonates across the political spectrum in a way that traditional wealth-tax debates do not.

“A wealth tax is more simplistic and falling along ideological lines,” Liao said. “If we’re talking about broad societal change, it is much more than wealth redistribution. It is something that’s going to touch every single person.”

Surveys show more than half of Americans fear AI could cost someone in their household a job — a worry now spreading even among tech industry workers. Meanwhile, anticipated public offerings from AI giants like OpenAI and Anthropic are expected to further concentrate the nation’s wealth. Currently, the top 10% of Americans hold nearly 70% of the country’s wealth, while the bottom half hold just 2.5%.

Other political figures are wrestling with the same issue. Former Chicago Mayor Rahm Emanuel, a moderate Democrat weighing a presidential bid, has floated stricter AI regulations and openness to basic income support for displaced workers. Sen. Bernie Sanders has proposed a national sovereign wealth fund financed by a 50% tax on AI companies, effectively making the public a stakeholder in the technology’s profits. Even Vice President J.D. Vance has weighed in, telling a podcast host recently that his greatest worry about AI isn’t job losses but the erosion of “social harmony” driven by widening inequality.

“If you make rich people way richer, you are going to have significant problems,” Vance said. “That is one of the consequences that I see from AI.”

He added that Trump is broadly receptive to Sanders’ proposal, even as the president maintains close relationships with numerous tech industry leaders.

Despite Newsom’s newfound rhetoric, some progressives remain cautious. Lorena Gonzalez, head of the California Labor Federation, said she welcomes his attention to AI-driven inequality but wants to see stronger action limiting AI’s use in the workplace and preventing mass layoffs. Newsom has so far resisted calls for aggressive regulation or outright bans on the technology.

Earlier this year, Gonzalez warned Newsom during appearances alongside labor leaders in key presidential primary states that unions may withhold political support unless he takes a firmer stance.

“It’s not enough to say, ‘I feel your pain,’” Gonzalez said. “We don’t think that catastrophic job loss is inevitable.”

Original source: CalMatters

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Against a backdrop of Democratic anxiety over voter turnout and campaign resources for the November election — where California could play a crucial role in helping Democrats win back control of the U.S. House — Newsom and legislative leaders have maneuvered to reshape the swath of issues that voters will decide this fall.

Over the past week, the governor’s office and lawmakers announced five deals with the proponents of qualified ballot measures to remove them in exchange for legislative action — on employer liability, pandemic preparedness, children’s health care, high school finance classes and oil drilling. That’s more than in any previous election.

Their work may not yet be done. Though very little time remains, Newsom and legislative leaders continue to negotiate over several other proposals that could be added to the ballot next week — before it must be finalized by the Secretary of State’s Office — including bonds for school facilities and climate programs and an alternative to a tough-on-crime measure that progressives detest.

A spokesperson for Newsom refused to answer questions about why the governor’s office has been so involved this year crafting deals on ballot measures.

But there are a range of financial and political considerations for negotiating proposals off the ballot: How an initiative, which lawmakers have little power to amend, might affect the state budget; whether interest groups truly want to spend the millions necessary to wage a fierce campaign battle; and even what the most controversial proposals might mean for other races across the state.

“It has been very active, in part because voters expect their elected leaders to make tough decisions and take action,” Assembly Speaker Robert Rivas, a Salinas Democrat, said in a statement. “The Governor and my Assembly colleagues have done a lot of work bringing groups together and finding consensus, and this will benefit Californians when they weigh-in on important matters at the ballot box.”

This is a relatively new phenomenon in California politics. Before a decade ago, citizen-initiated measures could not be removed once they qualified for the ballot.

But in 2014, the Legislature created a process where proposed initiatives and constitutional amendments could be withdrawn up to 131 days before an election. It was expanded last year to referendums. That opened up a whole new system of policymaking in Sacramento, with lawmakers offering to pass compromise legislation to avert expensive or politically perilous campaign fights.

Some interest groups have figured out how to exploit the rules to their advantage, qualifying sweeping initiatives as leverage to win more modest changes — as in 2018, when soda companies spent millions to place a major anti-tax proposal on the ballot, then negotiated instead for a decade-long moratorium on new local taxes on sugary drinks.

Prior to this year, nine measures had been withdrawn from the ballot after qualifying, according to the political resource guide Ballotpedia. The most for any single election was three in 2018, when initiatives related to consumer data privacy and lead paint remediation were also withdrawn following legislative compromises.

The whirlwind of changes to this year’s ballot began last week, when organized labor agreed to support modifications to a unique state law that allows workers to sue their bosses over alleged workplace violations if business groups withdrew a measure to repeal the law completely. Separately, the California Supreme Court took the rare step of removing a sweeping anti-tax measure from the ballot following a legal challenge by Newsom and legislative leaders.

The governor’s office announced two more deals on Tuesday, with the proponents of initiatives to fund pandemic preparedness through a millionaires tax and expand state funding for health care for critically ill children. In exchange for pulling their measures from the ballot, Newsom agreed to expand the scope of a state medical research program to include technologies related to pandemic prevention and to include more money for children’s hospitals in the state budget.

An association of petroleum companies said Wednesday that it would abandon its referendum seeking to overturn a recent California law creating a 3,200-foot setback for oil and gas wells around homes and schools and challenge it in court instead.

Assemblymember Isaac Bryan, a Culver City Democrat with a large oil field in his district, negotiated the retreat. He told CalMatters that, in return, he agreed to scale back another bill he’s carrying about plugging low-producing wells — which he introduced in part to apply pressure to the oil companies.

“The ballot is often weaponized by those who are losing touch with both the people of California and the people’s representatives,” Bryan said. “That’s where we’re stepping in. We’re doing the people’s business. We’re making sure we’re trying to craft policy solutions that answer the real problems across California.”

The state Senate and Assembly spent several hours today, the final day for proponents to withdraw an initiative, passing bills to fulfill their end of various bargains. After the Legislature approved a measure to require financial literacy as a high school graduation requirement, a personal finance nonprofit executive announced he would pull his similar proposal from the ballot.

Minutes later, lawmakers sent a proposed constitutional amendment to voters that would prohibit forced labor, an anti-slavery policy recommended by the state reparations task force that would primarily affect inmates in California prisons. They also approved changes to another that was already on the ballot, which would make it easier for local governments to win voter approval for infrastructure and housing bonds, reflecting a deal with the real estate industry.

As many as four more measures could be added to the ballot next week as well, if legislators can work through contentious debates that are taking place behind the scenes.

Rivas told reporters that Newsom and legislative leaders are still trying to finalize the details of two $10 billion bonds, one for climate programs and another for school facilities. The extremely narrow victory of a mental health bond pushed by the governor in the March primary has shaken confidence in Sacramento about voter appetite for additional financing measures, but there is tremendous pressure from interest groups that would benefit from the money amid a bleak state budget environment.

“We’ve got to get that work done, so that way we can engage with members to see if we can build support to get these bonds on the ballot,” Rivas said.

After failing to get the proponents of an initiative that would increase penalties for some drug and property crimes to reconsider, the governor and legislative leaders are considering putting forward a competing ballot measure focused on retail theft — though there has been deep division among Democrats at the Capitol about how to proceed as they face rising concerns from voters about crime.

A long-delayed proposal to overhaul California’s statewide recall system, by forgoing the selection of a replacement unless an official has actually been recalled, is also advancing.

And lawmakers are now discussing delaying until 2026 a measure they placed on the ballot to undermine the anti-tax initiative that was recently removed by the Supreme Court. With that fight over, the unions that would have funded the campaign would rather spend their money elsewhere this election cycle.

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