Californians

The long-simmering fight between some of L.A.’s best-known billboard attorneys and Uber, one of their most frequent targets, is poised to spill out of the courtroom and onto the November ballot.

The ride-share giant is gathering signatures for an initiative that, if passed by voters, would cap how much attorneys can earn in vehicle collision cases. The company pledges the change will give victims a larger cut of their settlement money, alleging predatory attorneys are inflating medical bills to increase their own profits.

Lawyers claim it will decimate their lucrative niche — car crash lawsuits in the automobile haven that is California — and ultimately leave thousands of people with small or challenging cases unable to sue because they can’t find an attorney.

This fight, lawyers say, is existential.

Attorneys from Sweet James and Jacoby & Meyers — the names and faces of which will be imprinted in the minds of most California drivers — have given almost $1 million to a committee opposing the ballot measure, according to campaign filings. Dozens of other deep-pocketed attorneys have joined, raising an impressive war chest already surpassing $46 million.

“Uber knows darn well what they’ve done,” said Nicholas Rowley, among those leading the opposition. “This law is designed to wipe out ordinary working people’s ability to get representation.”

Attorneys have condemned the fee cap as a Trojan horse meant to trick voters into wrecking the delicate math behind personal injury lawsuits. Currently, personal injury attorneys typically take 33% to 40% of a client’s payout. That is enough, they say, for them to earn a living and risk taking cases on a contingency fee basis — meaning, if they lose, they don’t get paid.

Uber’s proposal would cap attorney fees for car crash cases at 25% and require extra costs — filing fees, depositions, experts — to be calculated before the fee split rather than coming out of the client’s portion.

The two sides have conflicting views of who would be expected to pay for medical fees, which often drain a significant portion of an injured client’s payout. Attorneys said in order to guarantee clients get 75% of the money, lawyers will have to foot the bill for these medical costs, opening the possibility they would walk away with nothing. Uber said the question of who covers medical costs is “not contemplated by the measure” andit expects clients would pay.

The measure would tightly limit what medical expenses can be claimed and curb most damages to rates based on insurance. A doctor-led political action committee opposing the measure has raised more than $4 million, according to campaign finance records, arguing it will prevent Californians from getting treatment.

Uber said in a statement that nothing in the measure prevents car accident victims from securing doctors and lawyers. Instead, the company said, the measure is aimed at tackling a perennial problem in California’s legal system: attorneys pushing car crash victims into expensive surgeries in order to fatten their fees. The only Californians impacted, Uber claims, will be “shady billboard lawyers whose business model relies on abusing auto accident victims for their own personal gain.”

“Californians deserve a system that prioritizes victims over billboard lawyers,” said Adam Blinick, Uber’s head of public policy. “Capping attorney fees, banning kickbacks, and ending inflated medical billing are common-sense reforms that will protect auto accident victims and lower costs, and we’re confident voters will agree.”

Uber has poured fuel on the fire with federal racketeering lawsuits targeting both Downtown LA Law Group, or DTLA, and Jacob Emrani, two prominent personal injury law offices in Southern California. The lawsuits allege the attorneys had “side agreements” with certain doctors to inflate medical bills for unnecessary procedures to get a larger payout.

In an Instagram post, DTLA called the lawsuit a “calculated attempt by a billion-dollar corporation” to suppress legitimate claims. An attorney representing Emrani called it meritless and part of a campaign “to shut the courthouse doors to victims injured by Uber drivers.”

Gearing up for a fight, Consumer Attorneys of California, a powerful trial lawyer trade group, is pushing three ballot measures of its own, including one seeking to increase legal liability for ride-share companies if a passenger is sexually assaulted by a driver and the other aiming to nullify the fee-capping measure if it passes. Billboards have sprung up across Los Angeles reminding Californians that Uber is the subject of a string of recent New York Times investigations into sexual assault by drivers.

The company said it has invested billions in keeping riders safe and has “done more than any other company to confront” sexual violence.

Consumer Watchdog, a consumer advocacy group that sponsored some of the billboards and receives funding from trial attorneys, put out a “consumer alert” branding the fee cap as a “license to kill” measure, claiming it would ultimately pave the way for Uber to move forward with robotaxis without worrying about getting sued. Uber said this was “flat-out untrue” and the measure has nothing to do with autonomous vehicles.

The push by Uber comes at a tense point for California’s legal bar. The Times reported this fall on private investors looking to bankroll California sex abuse cases, and separate allegations of fraudulent lawsuits and unethical conduct by Downtown LA Law Group, a firm known for car crash lawsuits that played a prominent role in L.A. County’s $4-billion sex abuse settlement.

DTLA has denied all wrongdoing and said it operates “with unwavering integrity, prioritizing client welfare.”

Some attorneys worry about how voters will perceive their industry when it’s time to cast ballots.

“I’ll tell you straight up, we could do a better job policing ourselves,” said Rowley, who said he believed the State Bar had historically been weak on California lawyers. “It creates a situation where Uber can do what it’s doing.”

The exterior of Downtown LA Law Group at 601 N. Vermont Ave. in Los Angeles.

(Carlin Stiehl/Los Angeles Times)

Calls for reform within California’s legal community have gained momentum in recent months.

Joseph Nicchitta, the county’s interim chief executive officer, called on the State Bar to implement “badly needed ethical reforms” that would make big personal injury cases less profitable for lawyers. Attorney and business advocacy groups have made public pleas to keep private equity out of the state’s legal landscape, worrying it fuels frivolous lawsuits. Gov. Gavin Newsom has similarly expressed unease.

“Our legal system is meant to provide justice, transparency, and accountability — not a business model that uses survivors of abuse or trauma as a revenue stream,” said a spokesperson for the governor. “California can — and must — hold two truths at the same time: standing unequivocally with survivors and victims, while also demanding integrity within the law firms and other businesses that work within our legal system.”

Californians unhappy with problem law firms already have a way to ding them without the ballot measure, Uber’s opponents argue. A new law went into effect Jan. 1 giving private citizens the right to sue an attorney for unethical practices. Many such practices are already illegal but seldom prosecuted. That includes advertising containing false promises and using third parties to solicit clients.

The Times reported this fall that nine plaintiffs represented by Downtown LA Law Group were paid by recruiters to sue the county for sex abuse in juvenile halls, four of whom said they were told to make up claims. The firm has denied paying anyone to file lawsuits.

“This is exactly why we wrote the bill,” said Sen. Tom Umberg (D-Santa Ana), a lawyer who oversees the Senate Judiciary Committee, in response to The Times Dec. 31 story on the firm. “I expect that someone will take it upon themselves to actually enforce that law.”

SAN FRANCISCO — With California facing deep budget uncertainty and widening economic divides, Gov. Gavin Newsom on Friday vowed to protect residents on both ends of the income spectrum — from wealthy business leaders he fears could leave the state to unhoused Californians relying on state-funded services.

That balancing act was on display as Newsom sharpened his criticism of a proposed ballot measure to tax billionaires, a measure opponents say may push tech companies and other businesses out of the state and wound California’s economy.

“It’s already had an outsized impact on the state,” said Newsom, speaking to reporters in San Francisco’s Mission District.

Newsom is trying to head off a union’s plan for a November ballot measure that would put a one-time tax on billionaires. If approved by voters, it would raise $100 billion by imposing a one-time wealth tax of 5% on fortunes.

Service Employees International Union-United Healthcare Workers West, the union behind the proposal, wants to raise money to help millions of Californians affected by widespread healthcare cuts by the Trump administration.

California political leaders, facing a tough budget year, warn that the state does not have the financial capacity to backfill those cuts.

Newsom, who is working behind the scenes with SEIU-UHW in an effort to stop the ballot measure, on Friday appeared doubtful that a deal could be struck with proponents of the measure.

“I don’t know what there is to compromise,” said Newsom, calling the measure “badly drafted” and arguing the money raised wouldn’t be spread among other groups.

“It does not support our public educators. Does not support our teachers and counselors, our librarians. It doesn’t support our first responders and firefighters. Doesn’t support the general fund and parks.”

Two top Newsom advisors, Dan Newman and Brian Brokaw, are raising money and have formed a committee to oppose the measure.

The billionaire tax measure is dividing political leaders in California and the rest of the country, with both Rep. Ro Khanna (D-Fremont) and Sen. Bernie Sanders (I-Vermont) supporting the tax.

“It’s a matter of values,” Khanna said on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

Already, some prominent business leaders are taking steps that appear to be part of a strategy to avoid a potential levy.

On Dec. 31, PayPal co-founder Peter Thiel announced that his firm had opened a new office in Miami, the same day venture capitalist David Sacks said he was opening an office in Austin.

Suzanne Jimenez, chief of staff for SEIU-United Healthcare Workers West, called it a myth that billionaires are leaving the state and criticized Newsom.

“Right now, his priority seems to be protecting roughly 200 ultra-wealthy individuals,” she said. “Healthcare workers are focused on protecting emergency room access and lifesaving care for all 39 million Californians.”

The proposed tax has reverberated throughout the Silicon Valley and Bay Area, home to some of the world’s most lucrative tech companies and financially successful venture capitalists.

Newsom was in San Francisco on Friday, where he served two terms as mayor, to address a separate, more pressing concern for Californians on the opposite end of the economic spectrum — those living in poverty and on the city streets.

Newsom, who is weighing a 2028 presidential run, spoke at Friendship House, a substance-use treatment provider, where the governor said California is turning around the state’s homelessness crisis.

He pointed to a recent 9% statewide drop in unsheltered homelessness as evidence that years of state investment and policy changes are beginning to show results.

That was the first such drop in more than 15 years on an issue that is a political vulnerability for the two-term governor. California still accounts for roughly a quarter of the nation’s homeless population, according to the Public Policy Institute of California.

Newsom said Friday that the decline reflects years of expanded state investment in shelter, housing and behavioral healthcare, combined with stricter expectations for local governments receiving state funds. He said the state’s efforts contrast with what is happening elsewhere, pointing to homelessness continuing to rise nationally.

The governor’s budget proposal, which was released Jan. 9, includes $500 million for California’s Homeless Housing, Assistance and Prevention program, which provides grants to cities, counties and local continuums of care to prevent and reduce homelessness.

That money is paired with investments from Proposition 1, a 2024 ballot measure backed by Newsom and approved by voters. The measure authorized billions in state bonds to expand mental health treatment capacity and housing for people with serious behavioral health needs.

Following Newsom’s budget proposal, legislators, housing advocates and local officials said the funding falls short of the scale of the problem.

That concern is unfolding against a constrained budget backdrop, with the governor’s finance director warning that even as AI-related tax revenues climb, rising costs and federal cuts are expected to leave the state with a projected $3 billion deficit next year.

The nonpartisan Legislative Analyst’s Office said Newsom’s plan leaves California financially exposed, noting that the administration’s higher revenue estimates exclude the risk of a stock market correction that could significantly worsen the state’s budget outlook.

The analyst’s office said those risks are compounded by projected multiyear deficits of $20 billion to $35 billion annually, underscoring what it called a growing structural imbalance.

Newsom on Friday called the LAO’s projections about the budget too pessimistic, but said the office is “absolutely right about structural problems in the state.”

Newsom’s budget does not include significant funding to offset federal cuts to Medicaid and other safety-net programs under President Trump and a Republican-led Congress, reductions that local officials warn could have far-reaching consequences for local governments and low-income residents.

Addressing those broad concerns, the governor defended his budget and suggested the spending plan will change by May, when the state’s financial outlook is more clear.

Times staff writer Seema Mehta and Caroline Petrow-Cohen contributed to this report.

A federal judge on Thursday dismissed a U.S. Justice Department lawsuit demanding California turn over its voter rolls, calling the request “unprecedented and illegal” and accusing the federal government of trying to “abridge the right of many Americans to cast their ballots.”

U.S. District Judge David O. Carter, a Clinton appointee based in Santa Ana, questioned the Justice Department’s motivations and called its lawsuit demanding voter data from California Secretary of State Shirley Weber not just an overreach into state-run elections, but a threat to American democracy.

“The centralization of this information by the federal government would have a chilling effect on voter registration which would inevitably lead to decreasing voter turnout as voters fear that their information is being used for some inappropriate or unlawful purpose,” Carter wrote. “This risk threatens the right to vote which is the cornerstone of American democracy.”

Carter wrote that the “taking of democracy does not occur in one fell swoop; it is chipped away piece by piece until there is nothing left,” and that the Justice Department’s lawsuit was “one of these cuts that imperils all Americans.”

The Justice Department did not immediately respond to a request for comment late Thursday.

In a video she posted to the social media platform X earlier Thursday, Assistant Atty. Gen. Harmeet Dhillon — who heads the Justice Department’s Civil Rights Division — said she was proud of her office’s efforts to “clean up the voter rolls nationally,” including by suing states for their data.

“We are going to touch every single state and finish this project,” she said.

Weber, who is California’s top elections official, said in a written statement that she is “entrusted with ensuring that California’s state election laws are enforced — including state laws that protect the privacy of California’s data.”

“I will continue to uphold my promise to Californians to protect our democracy, and I will continue to challenge this administration’s disregard for the rule of law and our right to vote,” Weber said.

Gov. Gavin Newsom’s office called the decision another example of “Trump and his administration losing to California” — one day after another court upheld California’s congressional redistricting plan under Proposition 50, which the Trump administration also challenged in court after state voters passed it overwhelmingly in November.

The Justice Department sued Weber in September after she refused to hand over detailed voter information for some 23 million Californians, alleging that she was unlawfully preventing federal authorities from ensuring state compliance with federal voting regulations and safeguarding federal elections against fraud.

It separately sued Weber’s counterparts in various other states who also declined the department’s requests for their states’ voter rolls.

The lawsuit followed an executive order by President Trump in March that purported to require voters to provide proof of citizenship and ordered states to disregard mail ballots not received by election day. It also followed years of allegations by Trump, made without evidence, that voting in California has been hampered by widespread fraud and voting by noncitizens — part of his broader and equally unsupported claim that the 2020 presidental election was stolen from him.

In announcing the lawsuit, Atty. Gen. Pam Bondi said in September that “clean voter rolls are the foundation of free and fair elections,” and that the Justice Department was going to ensure that they exist nationwide.

Weber denounced the lawsuit at the time as a “fishing expedition and pretext for partisan policy objectives,” and as “an unprecedented intrusion unsupported by law or any previous practice or policy of the U.S. Department of Justice.”

The Justice Department demanded a “current electronic copy of California’s computerized statewide voter registration list”; lists of “all duplicate registration records in Imperial, Los Angeles, Napa, Nevada, San Bernardino, Siskiyou, and Stanislaus counties”; a “list of all duplicate registrants who were removed from the statewide voter registration list”; and the dates of their removals.

It also demanded a list of all registrations that had been canceled due to voter deaths; an explanation for a recent decline in the recorded number of “inactive” voters in California; and a list of “all registrations, including date of birth, driver’s license number, and last four digits of Social Security Number, that were canceled due to non-citizenship of the registrant.”

Carter, in his ruling Thursday, took particular issue with the Justice Department’s reliance on federal civil rights laws to make its case.

“The Department of Justice seeks to use civil rights legislation which was enacted for an entirely different purpose to amass and retain an unprecedented amount of confidential voter data. This effort goes far beyond what Congress intended when it passed the underlying legislation,” Carter wrote.

Carter wrote that the legislation in question — including Title III of the Civil Rights Act of 1960 and the National Voter Registration Act (NVRA) of 1993 — was passed to defend Black Americans’ voting rights in the face of “persistent voter suppression” and to “combat the effects of discriminatory and unfair registration laws that cheapened the right to vote.”

Carter found that the Justice Department provided “no explanation for why unredacted voter files for millions of Californians, an unprecedented request, was necessary” for the Justice Department to investigate the alleged problems it claims, and that the executive branch simply has no power to demand such data all at once without explanation.

A contentious housing bill that would have capped rent increases to 5% a year died in the Assembly on Tuesday, a decision greeted with boos and cries of disapproval from spectators packed inside the committee chamber.

Assembly Bill 1157 would have lowered California’s limit on rent increases from 10% to 5% annually and removed a clause that allows the cap to expire in 2030. It also would have extended tenant protections to single-family homes — though the bill’s author, Assemblyman Ash Kalra (D-San José), offered to nix that provision.

“Millions of Californians are still struggling with the high cost of rent,” Kalra said. “We must do something to address the fact that the current law is not enough for many renters.”

Assemblymember Diane Dixon (R-Newport Beach) said she was concerned the Legislature was enacting too many mandates and restrictions on property owners. She pointed to a recent law requiring landlords to equip rentals with a refrigerator.

“That sounds nice and humanly caring and all that and warm and fuzzy but someone has to pay,” she said. “There is a cost to humanity and how far do we squeeze the property owners?”

The California Apartment Assn., California Building Industry Assn., California Chamber of Commerce and California Assn. of Realtors spoke against the legislation during Tuesday’s hearing before the Assembly Judiciary Committee.

Debra Carlton, spokesperson for the apartment association, said the bill sought to overturn the will of the voters who have rejected several ballot measures that would have imposed rent control.

“Rather than addressing the core issue, which is California’s severe housing shortage, AB 1157 places blame on the rental housing industry,” she said. “It sends a chilling message to investors and builders of housing that they are subject to a reversal of legislation and laws by lawmakers. This instability alone threatens to stall or reverse the great work legislators have done in California in the last several years.”

Supporters of the bill included the Alliance of Californians for Community Empowerment Action, a statewide nonprofit that works for economic and social justice. The measure is also sponsored by Housing Now, PICO California, California Public Advocates and Unite Here Local 11.

The legislation failed to collect the votes needed to pass out of committee.

On Monday, proponents rallied outside the Capitol to drum up support. “We are the renters; the mighty mighty renters,” they chanted. “Fighting for justice, affordable housing.”

“My rent is half of my income,” said Claudia Reynolds, who is struggling to make ends meet after a recent hip injury. “I give up a lot of things. I use a cellphone for light; I don’t have heat.”

Lydia Hernandez, a teacher and renter from Claremont, said she used to dream of owning a home. As the first person in her family to obtain a college degree, she thought it was an obtainable goal. But now she worries she won’t even be able to keep up with her apartment’s rent.

Hernandez recalled noticing a woman who had recently become homeless last week on her way to school.

“I started to tear up,” said Hernandez, her voice cracking. “I could see myself in her in my future, where I could spend my retirement years living an unsheltered life.”

After Tuesday’s vote, Anya Svanoe, communications director for ACCE Action, said many of their members felt betrayed.

“While housing production is a very important part of getting us out of this housing crisis, it isn’t enough,” she said. “Families are in dire need of protections right now and we can’t wait for trickle-down housing production.”

In California, 40.6% of households are spending more than 30% of their income on housing, according to an analysis released in 2024 by the Pew Research Center. The U.S. Department of Housing and Urban Development considers households that spend more than 30% of their incomes on housing to be “cost burdened.”

The son of a storied Republican president, Michael Reagan, who recently died, was memorialized as a stalwart supporter of his father’s legacy. But in his home state of California, Reagan was remembered as much for his community involvement — which was at times so low-key that some didn’t even realize his father was Ronald Reagan.

“The cool thing about Michael is you never would have known that he was the son of a president,” said Victor Franco, a Democratic strategist who met Reagan more than a decade ago while Franco’s kids were students at St. Mel’s Catholic school in Woodland Hills, where Reagan’s daughter was a teacher. “He was an everyday guy chatting up with the dads.”

Though Reagan would speak at career days and donate tours of the Reagan ranch near Santa Barbara for school fundraisers, Franco recalls Reagan’s presence during the fathers club’s annual chili cook-offs and barbecue competitions.

“We referred to him as our taste tester. He was always, ‘Hey, I need to taste that brisket, or I need to taste the chicken and make sure that it’s good,’” Franco said. “Even though he had the pedigree of, you know, a dad who was president, he was a regular guy to all of us, and just a really sweet, nice person.”

After battling cancer, Reagan died Sunday, according to statements released on Tuesday by organizations affiliated with former President Reagan.

Michael Reagan was lauded by former state GOP leaders not only for his work in leading the conservative movement through his nationally syndicated radio show, but also his willingness to engage in California politics.

He was “a thoughtful and compassionate conservative leader. Clearly his father’s son, he nonetheless forged his own distinct and influential voice within the conservative movement,” said former California Republican Party Chairman Ron Nehring. “Through his long career in radio, Michael was a tireless advocate for the everyday American who felt ignored or left behind by politics.”

Jim Brulte, a former state GOP chairman and powerful legislative leader, said Reagan was always available to aid the state party.

“He was a good man with a big heart who loved America,” Brulte said. “And he was a crowd favorite. He knew how to connect with everyone in the room.”

Conservative strategist Jon Fleischman, a former executive director of the state party, added that Reagan was as comfortable in informal settings as in the more privileged environs he grew up in as the son of the president.

Fleischman recalled going to dinner with Reagan at Wolfgang Puck’s restaurant in Beverly Hills, and the celebrity chef — upon hearing that the former president’s son was dining at his establishment — greeting them.

“So Michael started doing his impressions of his dad. And I don’t know if it’s normally that easy to make Wolfgang Puck laugh, but it was a very funny moment watching him,” Fleischman said. “He basically said, ‘You sound just like your old man.’”

The move was on brand, said Fleischman, who first met Reagan in 1989 and regularly interacted with him when Reagan was hosting a talk radio show and Fleischman had started a powerful conservative website.

“This is a guy who could speak to the ballroom at the Century Plaza Hotel back in the day, and then the next day speak to six activists at a California Republican Assembly meeting at a Denny’s,” Fleischman said, recalling that whenever Reagan called, a picture of Michael and Ronald together would appear on his phone’s screen.

“He just loved people, and he loved to try to make a difference,” Fleischman said. “And I think he spent a lot of time in the latter years of his life just trying to be someone that his dad would look up to. His dad loomed, obviously, very large in his life.”

Franco, the Democratic strategist, recalled similarly fond memories about his interactions with Reagan despite their political differences, such as when he spoke about the Secret Service being alarmed that the elder Reagan was driving an old pick-up truck to ferry VIP guests around his ranch or riding horses with them.

“Michael was great to grab a cocktail with at a casino night and talk,” Franco said.

The fiery debate about a proposed ballot measure to tax California’s billionaires has sparked some soul-searching across the state.

While the idea of a one-time tax on more than 200 people has a long way to go before getting onto the ballot and would need to be passed by voters in November, the tempest around it captures the zeitgeist of angst and anger at the core of California. Silicon Valley is minting new millionaires while millions of the state’s residents face the loss of healthcare coverage and struggle with inflation.

Supporters of the proposed billionaire tax say it is one of the few ways the state can provide healthcare for its most vulnerable. Opponents warn it would squash the innovation that has made the state rich and prompt an exodus of wealthy entrepreneurs from the state.

The controversial measure is already creating fractures among powerful Democrats who enjoy tremendous sway in California. Progressive icon Sen. Bernie Sanders (I-Vt.) quickly endorsed the billionaire tax, while Gov. Gavin Newsom denounced it .

The Golden State’s rich residents say they are tired of feeling targeted. Their success has not only created unimaginable wealth but also jobs and better lives for Californians, they say, yet they feel they are being punished.

“California politics forces together some of the richest areas of America with some of the poorest, often separated by just a freeway,” said Thad Kousser, a political science professor at UC San Diego. “The impulse to force those with extreme wealth to share their riches is only natural, but often runs into the reality of our anti-tax traditions as well as modern concerns about stifling entrepreneurship or driving job creation out of the state.”

The state budget in California is already largely dependent on income taxes paid by its highest earners. Because of that, revenues are prone to volatility, hinging on capital gains from investments, bonuses to executives and windfalls from new stock offerings, and are notoriously difficult for the state to predict.

The tax proposal would cost the state’s richest residents about $100 billion if a majority of voters support it on the November ballot.

Supporters say the revenue is needed to backfill the massive federal funding cuts to healthcare that President Trump signed this summer. The California Budget & Policy Center estimates that as many as 3.4 million Californians could lose Medi-Cal coverage, rural hospitals could shutter and other healthcare services would be slashed unless a new funding source is found.

On social media, some wealthy Californians who oppose the wealth tax faced off against Democratic politicians and labor unions.

An increasing number of companies and investors have decided it isn’t worth the hassle to be in the state and are taking their companies and their homes to other states with lower taxes and less regulation.

“I promise you this will be the final straw,” Jessie Powell, co-founder of the Bay Area-based crypto exchange platform Kraken, wrote on X. “Billionaires will take with them all of their spending, hobbies, philanthropy and jobs.”

Proponents of the proposed tax were granted permission to start gathering signatures Dec. 26 by California Secretary of State Shirley Weber.

The proposal would impose a one-time tax of up to 5% on taxpayers and trusts with assets, such as businesses, art and intellectual property, valued at more than $1 billion. There are some exclusions, including property.

They could pay the levy over five years. Ninety percent of the revenue would fund healthcare programs and the remaining 10% would be spent on food assistance and education programs.

To qualify for the November ballot, proponents of the proposal, led by the Service Employees International Union-United Healthcare Workers West, must gather the signatures of nearly 875,000 registered voters and submit them to county elections officials by June 24.

The union, which represents more than 120,000 healthcare workers, patients and healthcare consumers, has committed to spending $14 million on the measure so far and plans to start collecting signatures soon, said Suzanne Jimenez, the labor group’s chief of staff.

Without new funding, the state is facing “a collapse of our healthcare system here in California,” she said.

Rep. Ro Khanna (D-Fremont) spoke out in support of the tax.

“It’s a matter of values,” he said on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have the Medicaid.”

The Trump administration did not respond to requests for comment.

The debate has become a lightning rod for national thought leaders looking to target California’s policies or the ultra-rich.

On Tuesday, Sanders endorsed the billionaire tax proposal and said he plans to call for a nationwide version.

“This is a model that should be emulated throughout the country, which is why I will soon be introducing a national wealth tax on billionaires,” Sanders said on X. “We can and should respect innovation, entrepreneurship and risk-taking, but we cannot respect the extraordinary level of greed, arrogance and irresponsibility that is currently being displayed by much of the billionaire class.”

But there isn’t unanimous support for the proposal among Democrats.

Notably, Newsom has consistently opposed state-based wealth taxes. He reiterated his opposition when asked about the proposed billionaires’ tax in early December.

“You can’t isolate yourself from the 49 others,” Newsom said at the New York Times DealBook Summit. “We’re in a competitive environment. People have this simple luxury, particularly people of that status, they already have two or three homes outside the state. It’s a simple issue. You’ve got to be pragmatic about it.”

Newsom has opposed state-based wealth taxes throughout his tenure.

In 2022, he opposed a ballot measure that would have subsidized the electric vehicle market by raising taxes on Californians who earn more than $2 million annually. The measure failed at the ballot box, with strategists on both sides of the issue saying Newsom’s vocal opposition to the effort was a critical factor.

The following year, he opposed legislation by a fellow Democrat to tax assets exceeding $50 million at 1% annually and taxpayers with a net worth greater than $1 billion at 1.5% annually. The bill was shelved before the legislature could vote on it.

The latest effort is also being opposed by a political action committee called “Stop the Squeeze,” which was seeded by a $100,000 donation from venture capitalist and longtime Newsom ally Ron Conway. Conservative taxpayer rights groups such as the Howard Jarvis Taxpayers Assn. and state Republicans are expected to campaign against the proposal.

The chances of the ballot measure passing in November are uncertain, given the potential for enormous spending on the campaign — unlike statewide and other candidate races, there is no limit on the amount of money donors can contribute to support or oppose a ballot measure.

“The backers of this proposed initiative to tax California billionaires would have their work cut out for them,” said Kousser at UC San Diego. “Despite the state’s national reputation as ‘Scandinavia by the Sea,’ there remains a strong anti-tax impulse among voters who often reject tax increases and are loath to kill the state’s golden goose of tech entrepreneurship.”

Additionally, as Newsom eyes a presidential bid in 2028, political experts question how the governor will position himself — opposing raising taxes but also not wanting to be viewed as responsible for large-scale healthcare cuts that would harm the most vulnerable Californians.

“It wouldn’t be surprising if they qualify the initiative. There’s enough money and enough pent-up anger on the left to get this on the ballot,” said Dan Schnur, a political communications professor who teaches at USC, Pepperdine and UC Berkeley.

“What happens once it qualifies is anybody’s guess,” he said.

Lorena Gonzalez, president of the California Federation of Labor Unions, called Newsom’s position “an Achilles heel” that could irk primary voters in places like the Midwest who are focused on economic inequality, inflation, affordability and the growing wealth gap.

“I think it’s going to be really hard for him to take a position that we shouldn’t tax the billionaires,” said Gonzalez, whose labor umbrella group will consider whether to endorse the proposed tax next year.

California billionaires who are residents of the state as of Jan. 1 would be impacted by the ballot measure if it passes . Prominent business leaders announced moves that appeared to be a strategy to avoid the levy at the end of 2025. On Dec. 31, PayPal co-founder Peter Thiel announced that his firm had opened a new office in Miami, the same day venture capitalist David Sacks said he was opening an office in Austin.

Wealth taxes are not unprecedented in the U.S. and versions exist in Switzerland and Spain, said Brian Galle, a taxation expert and law professor at UC Berkeley.

In California, the tax offers an efficient and practical way to pay for healthcare services without disrupting the economy, he said.

“A 1% annual tax on billionaires for five years would have essentially no meaningful impact on their economic behavior,” Galle said. “We’re funding a way of avoiding a real economic disaster with something that has very tiny impact.”

Palo Alto-based venture capitalist Chamath Palihapitiya disagrees. Billionaires whose wealth is often locked in company stakes and not liquid could go bankrupt, Palihapitiya wrote on X.

The tax, he posted, “will kill entrepreneurship in California.”