A billionaire tax to solve Medicaid funding cuts? The California Major Union floats a one-time policy correction

Supporters, including the Service Employees International Union, hope to put the statewide measure before voters next year. The tax would be on the net worth of California’s wealthiest residents. A small portion of the money will also help fund K-12 education since the federal government has threatened to withhold grant money from public schools.

Supporters of the measure sent a request to Attorney General Rob Bonta this week seeking approval to begin collecting signatures. The proposal must receive more than 870,000 signatures by next spring to qualify for the ballot in November 2026. If it qualifies, it is not guaranteed to pass. For example, Democratic Gov. Gavin Newsom has opposed tax increases in the past, including those that specifically target the wealthy.

Supporters of the initiative said it is critical to restore cuts to Medicaid because lives are at risk.

“If we don’t do this, millions of people will lose health care, countless people will go without treatment and there will be one tragedy after another,” said Dave Regan, president of the United Healthcare Workers of the West union.

Billionaires would have to pay for the tax year 2026, and could begin allocating funds 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.”

the Big tax and spending cuts President Donald Trump earlier this year signed the will Reducing more than $1 trillion More than a decade of federal Medicaid and food assistance.

The California Budget and Policy Center, a think tank in Sacramento, estimates that the state could lose $30 billion in federal funding annually for Medicaid, which could cause up to 3.4 million people to lose their coverage.

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, Newsom said earlier this month.

“California has led the nation in expanding access to affordable health care, but Donald Trump is destroying it,” he said.

Supporters of the proposed ballot initiative say billionaires have an obligation to do their part.

“We hope that some, perhaps a large number of billionaires, will realize that in the state where their wealth has grown, it is important that they have a responsibility to society to preserve California’s future,” said Emmanuel Saez, an economics professor at the University of California, Berkeley.