California voters will decide in November on a controversial proposal to impose a one-time 5% tax on individuals whose net worth exceeds $1 billion and who resided in the state as of Jan. 1, 2026.
The measure is backed by the Service Employees International Union Healthcare Workers West, which announced Thursday it would press forward despite mounting opposition from top Democrats and Silicon Valley executives.
The union collected 1.6 million signatures in support of the tax, nearly double the 874,641 required to qualify for the November ballot, according to SEIU-UHW.
California Secretary of State Shirley Weber confirmed the measure was eligible for the ballot after her department verified the required number of signatures submitted by organizers.
Union President Dave Regan said on a Zoom call that he is “all in on this,” adding that opponents of the proposal are “totally out of touch.”
The proposal aims to generate $100 billion in revenue, primarily to fund the state’s Medicaid system in the wake of federal healthcare cuts signed into law by President Donald Trump.
The measure would require the state to spend 90% of new revenue on healthcare, with the remaining 10% split between education and food assistance programs, a split that has angered Democratic advocacy groups.
Democratic Gov. Gavin Newsom, who is widely considered a presidential hopeful preparing to leave office in January, has opposed the measure, arguing it offers only a temporary fix to an ongoing structural problem.
Newsom made a late-hour effort to strike a deal, and SEIU-UHW offered to abandon the 5% tax in exchange for his support of a smaller 2% levy passed through the state legislature, but the governor’s office said the lower rate did not change his stance.
Former Health Secretary Xavier Becerra, considered the leading candidate to succeed Newsom as governor, also opposes the tax, widening the rift among prominent California Democrats.
On the other side, Rep. Ro Khanna and billionaire activist Tom Steyer have backed the effort, arguing that it would help close income inequality gaps in the state.
Brian Brokaw, a Newsom political adviser leading a political committee opposing the tax, said the measure would “make California’s biggest challenges worse.”
“Driving away the state’s sustainable tax base for a one-time grab is bad policy and an even worse deal for 40 million Californians who will be left holding the bag,” Brokaw said in a statement.
Opponents have raised $107.9 million as of June 15, according to state campaign finance data, with Google co-founder Sergey Brin having spent at least $82 million alone to fight the initiative.
Brin reportedly relocated to Nevada over tax concerns, while other billionaires including PayPal co-founder Peter Thiel, former Uber CEO Travis Kalanick, and Google co-founders Larry Page have also left the state ahead of the deadline.
Building a Better California, an organization co-founded by Brin and Google CEO Eric Schmidt, is seeking to introduce three counter-measures to the November ballot designed to curb the effects of the tax if it passes.
The nonpartisan Legislative Analyst’s Office estimates the proposal would generate tens of billions of dollars in the first few years, but that income tax revenues would subsequently decline by hundreds of millions of dollars annually.
UC Berkeley economics professor Enrico Moretti warned that the tax “has the potential to completely destroy California’s economy,” describing the revenue estimate as “way overly optimistic.”
Should the measure pass, it is widely expected to face immediate legal challenges, with critics citing the retroactive nature of the tax as grounds for a constitutional challenge that could tie up revenue for years.
Miranda Dietz, director of the Health Care Program at the UC Berkeley Labor Center, said that “close to 3 million Californians will lose healthcare over the next two years as a result of state and federal changes,” adding that “the need for health insurance and healthcare is not going anywhere.”
