California Voters to Decide on One‑Time Billionaire Tax Measure

California voters will determine in November whether to enact a one‑time 5% tax on residents with a net worth exceeding $1 billion. Supporters say the measure could generate roughly $100 billion to offset federal shortfalls in Medicaid funding, while Gov. Gavin Newsom and other state leaders oppose it as a temporary fix that might spur wealthy taxpayers to leave the state.

The proposal applies to California residents whose net worth was greater than $1 billion as of January 1, 2026. About 90% of the revenue would be allocated to health‑care programs, with the remaining 10% earmarked for education and food‑assistance initiatives.

After the measure qualified for the November ballot, supporters celebrated, asserting it would help keep hospitals and emergency rooms operational amid federal funding cuts.

Governor Newsom argues the tax is a short‑term response to a long‑term fiscal challenge, warning it could cause high‑income residents to relocate, thereby destabilizing California’s tax base. Democratic gubernatorial candidate Xavier Becerra, Republican candidate Steve Hilton, and a coalition of health‑care, education, and housing groups have voiced similar concerns.

The initiative includes provisions to ease payment: eligible taxpayers may elect to spread the liability over five annual installments, and certain individuals with predominantly illiquid assets can qualify for a deferral mechanism. Anti‑avoidance clauses are also incorporated to prevent the transfer of assets or restructuring of ownership to reduce tax liability.

The Labor union that supports the measure—Service Employees International Union‑United Healthcare Workers West—has previously offered to lower the tax rate to 2% in an effort to gain the governor’s support. According to the governor’s office, the reduced rate did not alter his opposition to the bill.

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