ballot measure

SACRAMENTO — For all the media attention California’s proposed billionaire tax has generated nationally — with some blasting it as a foolish Left Coast assault on American enterprise — the November ballot item has actually triggered a rift among progressive labor unions and Democrats, groups critical to the measure’s success.

Championed by California’s largest health workers union, Proposition 40 would levy a one-time, 5% tax on California’s roughly 200 billionaires. The measure aims to backfill Medicaid cuts signed into law last year by President Donald Trump, and would raise an estimated $100 billion.

Dave Regan, the measure’s architect and president of Service Employees International Union-United Healthcare Workers West, said the tax was intended to prevent “the imminent collapse of California’s health care system because of the Trump cuts in the ‘One Big Beautiful Bill.’”

Regan, who has become well-known for using ballot measures as leverage in negotiations with state lawmakers and the healthcare industry, seemed poised to channel public anxiety over economic affordability, access to medical care and anti-Trump sentiment when the initiative was announced last fall.

Today however, the initiative not only faces heavy and well-funded opposition from those it aims to tax, but also divided support among groups who traditionally favor taxes on the wealthy — labor unions. Both the powerful California Teachers Association and the State Building and Construction Trades Council of California have come out against Prop. 40, while Teamsters California and AFSCME California support it. Others unions have yet to weigh in, including the California Federation of Labor Unions and SEIU California, a parent organization for Regan’s healthcare worker union.

Establishment Democrats are also divided. Gov. Gavin Newsom aggressively opposed the measure and sought to negotiate with Regan to remove it from the ballot beginning last year. Days before a state deadline to withdraw ballot measures in late June, Regan publicly offered to trim the wealth tax to 2% over two years, an offer Newsom quickly rejected.

To some close observers, the offer signaled that Regan may have been looking for a way out of an expensive ballot fight.

“I found it unusual that he did that because he’s usually not that kind of negotiating type — he’s no nonsense,” said Democratic political consultant Steven Maviglio. “I don’t know if he felt it was a hot potato or what.”

Regan’s union spent $31 million to gather 1.6 million voter signatures to put the tax on the ballot.

“At the outset, this may have looked like the replay of a strategy he’s employed successfully many times in the past, but he ended up painting himself into a corner, and so now he’s stuck with an initiative that he knows he probably can’t pass,” said Dan Schnur, a politics and communications professor at Pepperdine, USC and UC Berkeley.

A March poll by UC Berkeley’s Institute of Governmental Studies showed 52% of registered voters support the billionaire tax while 33% opposed it and 15% were undecided. However, campaign experts say its position remains precarious, due in part to the deep pockets of its opponents.

Several billionaires, including Google co-founder Sergey Brin, have so far pumped a combined $118 million into a campaign committee that gathered enough signatures to place two other measures on the ballot aimed at undercutting the billionaire tax.

Groups that might otherwise support more revenue for healthcare have also come out against Prop. 40, including Planned Parenthood Affiliates of California and the California Medical Assn.

“The dangerous wealth tax directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile,” leaders of the California Medical Association, California Primary Care Association and California School Boards Association wrote in a joint statement.

Regan and fellow supporters insist that, without approval of the tax measure, Trump’s “Big Beautiful Bill” will gut the state’s healthcare resources.

“This will take between $20 and $25 billion annually out of our healthcare system, meaning three and a half million people are going to lose insurance, 150,000 health care workers will be laid off and over 20 million consumers are already paying more in premiums, deductibles and copays,” he said.

While prominent progressives such as Sen. Bernie Sanders (I-Vt.) and Rep. Ro Khanna (D-Fremont) have voiced support for the measure, some progressive opponents say its near exclusive focus on healthcare is a problem. (Only a small portion of tax revenues would go toward education and food security.)

The CTA said after reviewing the measure, its council of delegates “determined that this policy will not provide the sustainable and long-lasting funding that our schools and communities deserve.” Leaders of the state’s largest teachers union plan to focus their efforts on passing Proposition 3, which would make permanent an existing tax on certain high earners to fund schools and community colleges.

Labor unions have typically aligned in support of tax-raising ballot measures, including earlier temporary versions of this year’s Prop. 3 and an unsuccessful 2020 proposal to revamp commercial property taxes.

But the billionaire tax “doesn’t benefit everybody. It benefits workers in the healthcare sector primarily, and I think that’s why not everybody’s on board. It’s not a ‘rising tide lifts all boats’ kind of proposal,” Maviglio said.

In the 15 years he has led SEIU-UHW, Regan has become known for using expensive ballot measures — or the threat of them — to bring lawmakers and industry opponents to the negotiating table.

In a landmark 2023 deal, Regan secured a statewide $25 wage floor for healthcare workers after qualifying initiatives to raise industry wages in Los Angeles and other cities. The deal included a 10-year moratorium on minimum wage propositions. He also pushed ballot measure regulations on kidney dialysis clinics for three subsequent election cycles. Though none of them passed, the dialysis industry spent hundreds of millions between 2018 and 2022 to defeat them.

“Everybody knows that he is wielding ballot measures as a weapon to leverage his unionization or political demands. It’s not a secret. He’s admitted it,” said Brandon Castillo, a ballot measure strategist who often finds himself opposite Regan in ballot fights including the dialysis clinic propositions.

The measure retroactively applies a tax on billionaires who were residing in California as of Jan. 1. Newsom and other opponents say the initiative would drive the ultra-wealthy out of the state and their departure would blow a hole in the state budget.

California’s budget is dependent on income taxes the rich pay on stock market profits. The Legislative Analyst’s Office said the measure would “likely” result in an “ongoing decrease in state income tax revenues of hundreds of millions of dollars or more per year.”

“You may not be able to pick up and move to Texas or Florida to shelter your income from taxation, but I promise you that billionaires can, and do,” Newsom wrote in a post on Substack in late June. “Wealth is movable, and it shops for the state with the lowest taxes.”

After the talks ultimately failed to result in a deal, Newsom endorsed the idea of a national wealth tax instead.

“It’s easy to see how they may have believed that Newsom’s strongest incentive was simply to stay out,” Schnur said. “There’s a huge potential downside for a Democratic governor [to weigh in] on either side of this initiative. If you oppose it, you’re alienating your base. If you support it, you’re putting your state in dire fiscal peril.”

Focusing on raising taxes at the federal level allows the governor to support a popular idea nationally, which he can campaign on if he runs for president. His opposition to the measure in California could still leave him vulnerable to criticism from progressives in a national Democratic primary.

Times staff writer Taryn Luna contributed to this report.

SACRAMENTO — Gov. Gavin Newsom and Democratic leaders of the California Legislature plan to approve a proposed constitutional amendment this week that would ask voters to give them more flexibility over state spending and allow them to save money that could otherwise go back to taxpayers.

The proposal seeks to exempt deposits into state savings accounts from a spending limit that voters adopted through a series of ballot measures dating back to the late 1970s and to increase the share of tax revenue that can be put into the rainy day fund.

“Putting money aside to protect ourselves from future uncertainties isn’t just good government; it’s common sense,” Newsom said in a statement. “California is strong and resilient, but we’re not immune to economic headwinds. At a time when our essential services are under pressure, we have a responsibility to safeguard the programs and investments that Californians rely on.”

Assembly Constitutional Amendment 20, which Democrats are calling the “Save for California’s Future Act,” could receive push back from taxpayer advocates.

Under an existing state appropriations restraint, also known as the Gann limit, lawmakers cannot spend more than an amount determined by a formula that takes into consideration annual tax proceeds and changes to the population and cost of living. Tax revenue above the limit must be divided between schools and refunds to taxpayers.

With few exceptions, the limit applies to most appropriations of tax revenue, including money that lawmakers tuck away into the rainy day fund and other reserves. California voters have also capped the amount of money lawmakers can set aside in the rainy day fund to 10% of general fund proceeds in a given year.

Since taking office, Newsom has argued that it doesn’t make sense for savings to count as spending under state law.

State budget revenue is subject to dramatic swings from year to year based on stock market activity. The law, Newsom has said, prevents the state from saving more money in good years to stave off cuts to programs in bad years.

The proposed changes would exempt deposits into the rainy day fund and a short term reserve, called the “Projected Surplus Temporary Holding Account,” from the state appropriations limit. The cap on the rainy day fund would grow from 10% of general fund tax revenue to 20%.

“Californians live by a simple, bipartisan truth: set money aside when times are good so you’re ready when they’re not,” Assembly Speaker Robert Rivas (D-Hollister) said in a statement. “The Save For California’s Future Act is what responsible leadership looks like — and future taxpayers will thank us for it.”

The measure could incentivize Democrats to save more money because funds tucked away in the rainy day fund would no longer be considered expenditures counted toward the spending limit. By allowing lawmakers to set aside more money that is not subjected to state spending limits, it could also allow them to hold onto money that would be returned to taxpayers under current law.

The measure is slated for a vote Thursday. If approved by two-thirds of lawmakers, voters will consider the proposal on the November ballot.

An effort to exempt new apartment buildings in Los Angeles from the so-called mansion tax moved forward Wednesday, amid concerns that the tax is suppressing housing construction and making the affordability crisis worse.

In a 9 to 5 vote, the City Council directed the City Attorney to draft a ballot measure that would ask voters to change Measure ULA, which funds subsidized housing construction and homeless prevention efforts by taxing nearly all property sales over $5.3 million.

Once the proposal is drafted, it must come back to council for a final approval to make it onto the November ballot.

Wednesday was the deadline for the council to take the vote and stay on track to make the ballot this fall, said Councilmember Katy Yaroslavsky, who introduced the proposal along with Councilmember Tim McOsker.

“We should protect what is working and fix what’s not,” Yaroslavsky told colleagues before the vote. “If we fail to act today, that door closes.”

The ULA tax, approved by voters in 2022, is known as the mansion tax but applies a 4% tax to nearly all properties — whether they are mansions or not — if they sell for more than $5.3 million, increasing to 5.5% for sales at or above $10.6 million.

Under the proposed ballot measure, the ULA tax wouldn’t apply to multifamily buildings sold within 10 years of construction. There would also be some more technical changes put before voters, including to allow ULA money to be spent on temporary housing for homeless people.

Since ULA passed, apartment construction in Los Angeles has plummeted. Some studies have found that the additional tax on property sales has played a big role in the drop-off by adding extra costs for developers.

That’s led to fears that the tax, in some ways, is making the affordability crisis worse by suppressing new supply.

A coalition of business groups and pro-development activists have been pushing the council to amend ULA, in part hoping that the effort will blunt another possible measure on November’s ballot that would cancel ULA and other similar taxes altogether.

ULA supporters, however, have fought the exemption for new construction and say that other factors — like high interest rates — are the reasons for the multi-year construction drop-off. They also point to a surge in new building during the first three months of this year to argue that it’s too early to know ULA’s long-term impact.

Also on Wednesday, the council, in a unanimous vote, directed the City Attorney to draft a separate ballot measure that would exempt homeowners impacted by the Palisades fire from paying the ULA tax for five years, retroactive to Jan. 7, 2025.

“ULA has been an impediment to the Palisades recovery, leaving properties sitting empty and people mired in tax and regulatory hell,” City Councilmember Traci Park, who represents Pacific Palisades, told colleagues before the vote. “We need to move forward with this exemption.”

Similar to the broader ULA changes, the Palisades changes must receive a second council approval to make the ballot.

SACRAMENTO — A ballot measure that would require Californians to show identification every time they vote in person, or use a special pin number when submitting mail-in ballots, has qualified for the November ballot, elections officials announced Friday.

The measure also would require election officials to verify registered voters are U.S. citizens, aligning with a Republican-led push for new restrictions on voters in the wake of President Trump’s baseless claims that the 2020 election was stolen from him, and that undocumented immigrants are swaying elections by voting illegally.

Republican Assemblymember Carl DeMaio from San Diego has been pushing the measure for several years, while Trump and Republicans also are seeking a similar initiative at the federal level.

If passed, the California ballot measure would require a voter to present government-issued identification, such as a state driver’s license, every time they vote. Voters mailing ballots would be required to write a four-digit number, essentially a pin number, on their ballots matching the one generated when they registered to vote.

The pin would come from ID such as a driver’s license, or could be generated from the county. The vast majority of Californians mail in their ballots in elections.

Under the measure, election officials also must ensure that registered voters are U.S. citizens by using information from government records, which could include information in the federal Social Security Administration database, and maintain accurate voter registration lists.

DeMaio said the measure is different than a federal proposal, known as the SAVE Act, which stalled out in the U.S. Senate this week.

DeMaio said the state ballot measure “does not do away with mail in ballots, because voters of all political backgrounds like the convenience of mail in ballots. So we want to keep that convenience.”

The ballot measure needs a simple majority to pass.

Under current law, Californians are not required to show or provide identification when casting a ballot in person or by mail. They are required to provide identification when registering to vote, and must swear under penalty of perjury, a felony, that they are eligible to vote and a U.S. citizen.

Jenny Farrell, executive director of the League of Women Voters of California, told the Times that her group is committed to fighting the measure, arguing it would make it harder for people in the state to vote.

She said that people may forget to use a pin on their mail-in ballot, leading to their vote being disqualified. Similar changes in Texas, she said, led to a rise in rejected ballots due to technical errors.

“It doesn’t really weed out illegal voting,” which doesn’t actually exist, she said, “but it does cause more ballots to be incorrectly flagged and ultimately rejected.”

ACLU of Northern and Southern California, Common Cause, Disability Rights California also oppose the measure.

DeMaio filed for the ballot initiative in 2021 and 2023, but did not move forward with the signature collection process in order to fine-tune the ballot language.

He said his ballot measure wasn’t focused primarily about making sure that undocumented people don’t vote.

“That’s one element of concern that we’ve heard from some groups, but it really is making sure that, number one, we properly maintain our voter rolls,” he said.