California union proposes taxing billionaires to offset Medicaid cuts
[October 24, 2025]
By SOPHIE AUSTIN
SACRAMENTO, Calif. (AP) — A major union announced a proposal Thursday to
impose a one-time 5% tax on billionaires in California to address
federal funding cuts to health care for low-income people.
Proponents, including the Service Employees International Union, hope to
place the statewide measure before voters next year. The tax would be on
the net worth of California's richest residents. A small portion of the
money would also help fund K-12 education since the federal government
has threatened to withhold grant money from public schools.
Backers of the measure sent a request to Attorney General Rob Bonta this
week to get approval to start collecting signatures. The proposal would
have to receive more than 870,000 signatures by next spring to qualify
for the ballot in November 2026. If it qualifies, it's not guaranteed to
pass. Democratic Gov. Gavin Newsom, for example, has opposed tax hikes
in the past, including those specifically targeting the rich.
Proponents of the initiative said it was critical to backfill cuts to
Medicaid because lives are at stake.
“If we do not do this, millions of people are going to lose health care,
an untold number of people will go without treatment and there will be
tragedy after tragedy,” said Dave Regan, president of SEIU-United
Healthcare Workers West.
Billionaires would have to pay for tax year 2026, and the money could
start being appropriated in 2027. The tax would generate $100 billion in
revenue for the state, backers say. The initiative says it's “designed
to make the State tax system more equitable.”
The big tax and spending cuts law President Donald Trump signed earlier
this year will cut more than $1 trillion over a decade from Medicaid and
federal food assistance.
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Pediatrician Irving Phillips, left, examines a 16-month-old boy at a
CommuniCARE+OLE clinic, June 26, 2025, in Davis, Calif. (AP Photo/Godofredo
A. Vásquez, File)
 The California Budget and Policy
Center, a think tank in Sacramento, estimated the state could lose
$30 billion in federal funding a year for Medicaid, which would
result in up to 3.4 million people losing their coverage.
Newsom said earlier this month that 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 spending cuts law.
“California has led the nation in expanding access to affordable
health care, but Donald Trump is ripping it away," he said.
Proponents of the proposed ballot initiative say billionaires have
an obligation to do their part.
“We hope that some and perhaps hopefully a large number of
billionaires will recognize that it's important in the state where
they've grown their fortune that they have a responsibility to
society to preserve the future of California,” said Emmanuel Saez, a
professor of economics at the University of California, Berkeley.
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