SACRAMENTO, California. — SACRAMENTO, Calif. (AP) — A major union announced Thursday a proposal to impose a one-time 5% tax on California billionaires to address cuts in federal health care funding for low-income people.
Supporters, including the Service Employees International Union, hope to put the statewide measure before voters next year. The tax would be levied on the net worth of California's wealthiest residents. A small portion of the money will also help fund K-12 education as the federal government has threatened to withhold grants from public schools.
This week, supporters of the measure sent a request to Attorney General Rob Bonta seeking permission to begin collecting signatures. To qualify for the November 2026 ballot, the proposal must receive more than 870,000 signatures by next spring. If it passes, its acceptance is not guaranteed. Democratic Gov. Gavin Newsom, for example, has opposed tax increases in the past, including those that specifically target the wealthy.
Proponents said it was critical to make up for Medicaid cuts because lives were at stake.
“If we don't do this, millions of people will lose health care, countless more will go untreated, and there will be tragedy after tragedy,” said Dave Regan, president of SEIU-United Healthcare Workers West.
Billionaires will have to pay taxes for 2026, and the money could begin to be embezzled in 2027. Supporters say the tax would generate $100 billion in revenue for the state. The initiative says it is “designed to make the state's tax system more equitable.”
Big Tax and Spending Cuts Act President Donald Trump signed earlier this year cut by more than $1 trillion more than ten years from Medicaid and federal food assistance.
The California Budget and Policy Center, a Sacramento-based think tank, estimated the state could lose $30 billion a year in federal funding for Medicaid, causing up to 3.4 million people to lose coverage.
Earlier this month, Newsom said people enrolled in Covered California, the state's health insurance marketplace, could see their monthly health care bills nearly double next year as a result of the cost-cutting legislation.
“California leads the country in expanding access to affordable health care, but Donald Trump is taking it away,” he said.
Supporters of the proposed ballot initiative say billionaires have a responsibility to do their part.
“We hope that some, and perhaps a large number, of billionaires will recognize that in the state where they made their fortunes, it is important to be responsible to the public for preserving the future of California,” said Emmanuel Saez, an economics professor at the University of California, Berkeley.
