California billionaire tax proposal is slated to qualify for the November ballot

SACRAMENTO, Calif. (AP) — A proposal to temporarily increase taxes on billionaires in California to counter federal cuts to healthcare for low-income people has sufficient public support to qualify for the November ballot, the state’s top elections official said.

Secretary of State Shirley Weber, a Democrat, said Wednesday night that petitioners have collected more than the roughly 875,000 signatures needed to place the proposed tax before voters. It will qualify June 25 unless proponents pull the measure.

The proposal, backed by the Service Employees International Union Healthcare Workers West, would impose a one-time, 5% tax on individuals whose net worth exceeds $1 billion and who were living in the state as of Jan. 1, 2026. The goal is to generate $100 billion in revenue, mainly to fund the state’s Medicaid system with some money going to food assistance and education programs.

States have been debating how to respond to the major tax breaks and spending cuts legislation President Donald Trump signed last year. The proposal has already divided Democrats and major labor unions and triggered an expensive campaign to defeat it. The proposed tax is backed by prominent progressives including Vermont Sen. Bernie Sanders.

The measure has faced staunch pushback from Silicon Valley tech moguls as well as Democratic Gov. Gavin Newsom and prominent players in Sacramento. They include the California Medical Association and California School Boards Association, which helped launch a committee this week to oppose it. Newsom also opposed a ballot measure in 2022 to increase taxes on the wealthy, which would have funded programs that help people buy electric cars or install more chargers. Voters rejected it.

Critics say the measure would decrease state revenue over time by pushing the ultrawealthy to leave, taking the money they would contribute in income taxes with them. That would deal a huge blow to a state that relies on its top 1% of earners for nearly half of its personal income tax revenue.

The nonpartisan Legislative Analyst’s Office estimates that the proposal would generate tens of billions of dollars in the first few years, but that income tax revenues could subsequently decline by hundreds of millions of dollars annually.

Since the proposal was announced in October, Google co-founder Sergey Brin has donated $82 million to a political committee called “Building a Better California” that backs a variety of initiatives designed to blunt the billionaire tax proposal. It has raised more than $118 million, counting Brin’s contributions, from fewer than a dozen donors.

State lawmakers passed budget bills this week that aim to raise revenue in other ways, including by extending a tax on healthcare providers. Newsom and legislative leaders agree to this approach, Senate President pro Tempore Monique Limón said.

“The budget, as approved by the Legislature and now being negotiated with the Governor, does not include the billionaire’s tax,” the Democrat said in a statement. “Instead, it reflects additional revenues to address our long-term structural deficit.”