A tax on billionaires to fund healthcare is officially on the ballot

A union-backed proposal to impose a one-time 5% tax on California billionaires to fund healthcare has officially qualified for the November ballot after Gov. Gavin Newsom and his allies failed to broker a deal to keep it off. The measure, pushed by SEIU-United Healthcare Workers West, has divided Democrats and sparked opposition from wealthy figures like Sergey Brin and Chris Larsen, who have already poured millions into defeating it. Newsom rejected a compromise to lower the tax to 2%, citing concerns it could drive billionaires out of the state and harm the tax base.

Getting your Trinity Audio //trinityaudio.ai player ready...An attempt by Gov. Gavin Newsom and his allies to negotiate a deal to keep a proposed union-backed wealth tax off the November ballot came up short at the Thursday deadline, setting up an expensive fight in the governor’s final months in office. The one-time 5% tax on the state’s billionaires has rocked Sacramento in recent months, sharply dividing Democrats and splintering labor coalitions. The union behind the initiative — the Service Employees International Union-United Healthcare Workers West — says the measure is critical for stemming the budgetary bleeding from recent federal cuts to healthcare. In the final weeks before the June 25 deadline, Newsom’s team was working to broker a deal with SEIU-UHW to keep the tax off the ballot. He ultimately rejected a compromise from the union last week that would have dropped the levy from 5% to 2%. The governor has raised concerns that the tax would drive the state’s wealthiest residents out of California, doing long-term damage to the state’s tax base and stifling innovation. “What the governor made clear from the beginning is that he would not entertain any proposal or any compromise that taxed billionaires,” SEIU-UHW President Dave Regan said during a virtual press conference on Thursday evening. Union Vice President Debru Carthan accused the governor of being in “lockstep” with President Donald Trump and billionaires like Google co-founder Sergey Brin, who has already poured millions into efforts to defeat the initiative, and said that Newsom “has no plan to fix one of Trump’s deadliest domestic policy blunders.” The governor’s office would not comment on Carthan’s remarks, but said the governor believes the wealthiest Americans should pay more in taxes. However, Newsom believes the proposed measure is would put funding for schools, libraries, public safety and reproductive health clinics at risk. Multiple opposition groups quickly put out statements vowing to beat the billionaire’s tax after the measure had officially qualified. One of the groups, Golden State Promise, which has major funding from Ripple CEO Chris Larsen, said it has already spent $10 million on ads and voter outreach. “We are ready to defeat this convoluted nightmare of a measure in November,” Golden State Promise spokesperson Roger Salazar said. Several countermeasures aimed at overturning or weakening the billionaire tax have also made the November ballot. “You’re going to have more money than God thrown at this thing,” veteran consultant Garry South said of the fight ahead. This is a developing story. Check back for updates.