Proposed tax on billionaires in California would generate $100B for Medicaid, backers say

A major labor union is behind the push for a new ballot measure in California that would impose a one-time tax of 5% on the wealth of billionaires in the state to compensate for the loss of federal Medicaid funds.

In speaking to the Associated Press (AP), the Service Employees International Union said it hopes to officially present voters with the idea next year. The proposed law has already been sent to California Attorney General Rob Bonta’s office for approval. Once cleared, volunteers can start collecting signatures.

If it’s able to garner 870,000 potential backers, the tax would be on the November 2026 ballot. If passed, funds taken from the richest Californians would start coming in at the beginning of 2027.

According to the AP’s report, in addition to funding safety net health care programs like Medicaid, the revenue would also be used to support K–12 education, as a response to threats from the Trump administration to cut federal spending on public schools.

California has estimated it will lose $30 billion in Medicaid funds each year as a result of the One Big, Beautiful Bill Act that passed in July. Among other things, the act reduces provider taxes and subsequent federal spending on Medicaid, meaning states will have to find a way to generate their own money for the program.

As it stands, 3.4 million people in California alone are projected to lose their health coverage, according to the California Budget and Policy Center. The number could be even higher due to the rise in premiums expected for plans sold on the state’s health care exchange, which Gov. Gavin Newsom has warned could double as a result of federal policy.

If passed, the one-time billionaire tax in California is projected to bring $100 billion to the state, proponents calculate.

The full story from the Associated Press is available at the link below.