California helped make them the rich. Now a small proposed tax is spooking them out of the state.
California helped make them among the richest people in the world. Now they’re fleeing because California wants a little something back.
The proposed California Billionaire Tax Act has plutocrats saying they are considering deserting the Golden State for fear they’ll have to pay a one-time, 5% tax, on top of the other taxes they barely pay in comparison to the rest of us. Think of it as the Dust Bowl migration in reverse, with The Monied headed East to grow their fortunes.
The measure would apply to billionaires residing in California as of Jan. 1, 2026, meaning that 2025 was a big moving year month among the 200 wealthiest California households subject to the tax.
The recently departed reportedly include In-n-Out Burger owner and heiress Lynsi Snyder, PayPal co-founder and conservative donor Peter Thiel, Venture Capitalist David Sacks, co-founder of Craft Ventures, and Google co-founder Larry Page, who recently purchased $173 million worth of waterfront property in Miami’s Coconut Grove. Thank goodness he landed on his feet in these tough times.
The principal sponsor behind the Billionaire Tax Act is the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which contends that the tax could raise a $100 billion to offset severe federal cutbacks to California’s public education, food assistance and Medicaid programs.
The initiative is designed to offset some of the tax breaks that billionaires received from the One Big Beautiful Bill Act recently passed by the Republican-dominated Congress and signed by President Trump.
According to my colleague Michael Hiltzik, the bill “will funnel as much as $1 trillion in tax benefits to the wealthy over the next decade, while blowing a hole in state and local budgets for healthcare and other needs.”
The drafters of the Billionaire Tax Act still have to gather around 875,000 signatures from registered voters by June 24 for the measure to qualify on November’s ballot. But given the public ire toward the growing wealth of the 1%, and the affordability crisis engulfing much of the rest of the nation, it has a fair chance of making it onto the ballot.
If the tax should be voted into law, what would it mean for those poor tycoons who failed to pack up the Lamborghinis in time? For Thiel, whose net worth is around $27.5 billion, it would be around $1.2 billion, should he choose to stay, and he’d have up to five years to pay it.
Yes, it’s a lot … if you’re not a billionaire. It’s doubtful any of the potentially affected affluents would feel the pinch, but it could make a world of difference for kids depending on free school lunches, or folks who need medical care but can’t afford it because they’ve been squeezed by a system that places much of the tax burden on them.
According to the California Budget & Policy Center, the bottom fifth of California’s non-elderly families, with an average annual income of $13,900, spend an estimated 10.5% of their incomes on state and local taxes. In comparison, the wealthiest 1% of families, with an average annual income of $2.0 million, spend an estimated 8.7% of their incomes on state and local taxes.
“It’s a matter of values,” Rep. Ro Khanna (D-Fremont) posted on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have Medicaid.”
Many have argued losing all that wealth to other states will hurt California in the long run.
Even Gov. Gavin Newsom has argued against the measure, citing that the wealthy can relocate anywhere else to evade the tax. During the New York Times DealBook Summit last month, Newsom said, “You can’t isolate yourself from the 49 others. We’re in a competitive environment.”
He has a point, as do others who contend that the proposed tax may hurt California rather then help.
Sacks signaled he was leaving California by posting an image of the Texas flag on Dec. 31 on X and writing: “God bless Texas.” He followed with a post that read, “As a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.”
Arguments aside, it’s disturbing to think that some of the richest people in the nation would rather pick up and move than put a small fraction of their vast California-made — or in the case of the burger chain, inherited — fortunes toward helping others who need a financial boost.
When Virginia Guevara moved into a studio apartment in Orange County in 2024 after nearly a decade of homelessness, she needed far more than a roof and a bed.
Scattered visits to free clinics notwithstanding, Guevara hadn’t had a full medical checkup in years. She required dental work. She wanted to start looking for a job. And she was overwhelmed by the maze of paperwork needed simply to get her off the street, much less to make any of the other things happen.
But Guevara had help. The Jamboree Housing Corp., an affordable-housing nonprofit that renovated a former hotel in Stanton that Guevara now calls home, didn’t just move her in — it also provided her a fleet of wraparound services. Jamboree counselors helped Guevara navigate the healthcare system to see a doctor and a dentist, buy a few things for her apartment, and get training to become a caregiver.
“I was years on the street before I got the kind of help I needed so I could help myself,” said Guevara, 68.
Amid the Trump administration’s apparent opposition to using Medicaid funding for such social services, staffers at Jamboree and similar affordable-housing providers in California have feared losing federal money. The experimental waivers that provide the primary funding for the program expire at the end of 2026. But as it turns out, the state had the foresight several years ago to designate certain nonhousing social services — such as mental health care, drug counseling and job training — as a form of Medicaid spending that will continue to be reimbursed.
Catherine Howden, a spokesperson for the federal Centers for Medicare & Medicaid Services, confirmed that California’s use of the “in lieu of services” classification for these wraparound programs is allowed under federal regulations.
“It is starting to sound positive that we will, at the very least, be able to continue billing for these services after the waiver period,” said Natalie Reider, a senior vice president at Jamboree Housing.
During President Trump’s first term, states were permitted to use Medicaid money for social support services not typically covered by health insurance. But the second Trump administration is reeling that policy back in, saying that the intervening Biden administration took the supportive services process too far. Howden said in a statement that the policy “distracted the Medicaid program from its core mission: providing excellent health outcomes for vulnerable Americans.”
Through CalAIM, a five-year experimental build-out of the Medicaid system, programs such as Jamboree were able to leverage federal funding to offer the kinds of nonhousing social services that experts contend are essential to keeping people permanently housed.
However, these wraparound services are only one component of the CalAIM initiative, which is attempting to take Medicaid, known as Medi-Cal in California, in a more holistic direction across all areas of care. And when CalAIM launched, California officials gave the programs the Medicaid “in lieu of services” designation, known as ILOS, in effect putting them outside the waiver process and ensuring that even when CalAIM sunsets, money for those social initiatives will continue to flow.
“California has tried to future-proof many of the policy changes it has made in Medi-Cal by including them in mechanisms like ILOS that do not require federal waiver approval,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News. “That allows these policy changes to continue, even with a politically hostile federal administration.”
The designation allows these social services to be funded through Medicaid managed-care plans under existing federal laws because they are cost-effective substitutes for a Medicaid service or reduce the likelihood of patients needing other Medicaid-covered healthcare services, said Glenn Tsang, policy advisor for homelessness and housing at the state’s Department of Health Care Services. The state could not provide an estimate of the annual funding for these wraparound services because they are not distinguished from other payments made to Medicaid managed-care plans.
“We are full steam ahead with these services,” Tsang said, “and they are authorized.”
Although California was the first state to incorporate the designation for such housing and other health-related social support, Tsang said, several other states — including Arizona, Arkansas, Florida, New York and North Carolina — are now using the mechanism in a similar fashion.
Paul San Felipe, senior program manager for Jamboree, speaks during a meeting at Clara Vista in Stanton on Dec. 29, 2025.
(Eric Thayer / Los Angeles Times)
Early results suggest such support saves on healthcare spending. When Jamboree, MidPen Housing Corp. in Northern California, RH Community Builders in the Central Valley and other permanent supportive housing providers employ a holistic approach that includes social services, they reported higher rates of formerly homeless people remaining in housing, less frequent use of costly emergency health services, and more residents landing jobs that help them pay rent and stay housed.
At the nonprofit MidPen Housing, which serves 12 counties in and around the San Francisco Bay Area, roughly 40% of the units in the program’s pipeline are earmarked for “extremely low-income” people, a group that includes those who are homeless, said Danielle McCluskey, senior director of resident services.
CalAIM reimbursements help fund the part of MidPen that focuses on supportive services across a wide range of experiences, such as chronic homelessness, mental health issues and those leaving the foster care system. McCluskey described it as one leg of a three-legged stool, the others being real estate development and property management.
“If any of those legs are not getting what they need, if they’re not funded or not staffed or resourced, then that stool is kind of wobbly — off-kilter,” the director said.
A recent state evaluation found that people who used at least one of the housing support services — including navigation into new housing, healthcare assistance and a deposit to secure an apartment — saw a 13% reduction in emergency department visits and a 24% reduction in inpatient admissions in the six months that followed.
Documenting those outcomes is crucial because the department needs to show federal officials that the services lessen the need for other, often costlier Medicaid-covered care — the essence of the classification.
Advocates for the inclusion of supportive services argue that the American system ultimately saves money on those investments. As California’s homeless population has soared in recent years to more than 187,000 on a given night — nearly a quarter of the U.S. total — Jamboree has been allocating more of its resources to permanent supportive housing.
Founded in 1990 in Orange County, Jamboree builds various types of affordable housing using federal, state and private funding. Reider said about a fifth of the organization’s portfolio is dedicated to permanent supportive housing.
“They’re not going back out to the streets. They’re not going to jail. They’re not going to the hospitals,” Reider said. “Keeping people housed is the No. 1 outcome, and it is the cost-saver, right? We’re using Medicaid dollars, but we’re saving the system money in the long run.”
Guevara spent years living out of her truck before a shelter worker connected her with Jamboree. Now she also has found work as a caregiver.
(Eric Thayer / Los Angeles Times)
Guevara, who wound up on the streets after a falling-out with family in 2015, spent years living out of her truck before a shelter worker connected her with Jamboree. There, she was paired with a specialist to help her figure out how to get and see a doctor, and to keep up with scheduling the battery of medical tests she needed after years spent living in temporary shelters.
“I also got a job developer, who helped me get this job with the county so I can pay my rent,” Guevara said of her position as a part-time in-home caregiver. “Now I take care of people kind of the same way people have been taking care of me.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
Commentary: California made them rich. Now billionaires flee when the state asks for a little something back.
California helped make them the rich. Now a small proposed tax is spooking them out of the state.
California helped make them among the richest people in the world. Now they’re fleeing because California wants a little something back.
The proposed California Billionaire Tax Act has plutocrats saying they are considering deserting the Golden State for fear they’ll have to pay a one-time, 5% tax, on top of the other taxes they barely pay in comparison to the rest of us. Think of it as the Dust Bowl migration in reverse, with The Monied headed East to grow their fortunes.
The measure would apply to billionaires residing in California as of Jan. 1, 2026, meaning that 2025 was a big moving year month among the 200 wealthiest California households subject to the tax.
The recently departed reportedly include In-n-Out Burger owner and heiress Lynsi Snyder, PayPal co-founder and conservative donor Peter Thiel, Venture Capitalist David Sacks, co-founder of Craft Ventures, and Google co-founder Larry Page, who recently purchased $173 million worth of waterfront property in Miami’s Coconut Grove. Thank goodness he landed on his feet in these tough times.
The principal sponsor behind the Billionaire Tax Act is the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), which contends that the tax could raise a $100 billion to offset severe federal cutbacks to California’s public education, food assistance and Medicaid programs.
The initiative is designed to offset some of the tax breaks that billionaires received from the One Big Beautiful Bill Act recently passed by the Republican-dominated Congress and signed by President Trump.
According to my colleague Michael Hiltzik, the bill “will funnel as much as $1 trillion in tax benefits to the wealthy over the next decade, while blowing a hole in state and local budgets for healthcare and other needs.”
The drafters of the Billionaire Tax Act still have to gather around 875,000 signatures from registered voters by June 24 for the measure to qualify on November’s ballot. But given the public ire toward the growing wealth of the 1%, and the affordability crisis engulfing much of the rest of the nation, it has a fair chance of making it onto the ballot.
If the tax should be voted into law, what would it mean for those poor tycoons who failed to pack up the Lamborghinis in time? For Thiel, whose net worth is around $27.5 billion, it would be around $1.2 billion, should he choose to stay, and he’d have up to five years to pay it.
Yes, it’s a lot … if you’re not a billionaire. It’s doubtful any of the potentially affected affluents would feel the pinch, but it could make a world of difference for kids depending on free school lunches, or folks who need medical care but can’t afford it because they’ve been squeezed by a system that places much of the tax burden on them.
According to the California Budget & Policy Center, the bottom fifth of California’s non-elderly families, with an average annual income of $13,900, spend an estimated 10.5% of their incomes on state and local taxes. In comparison, the wealthiest 1% of families, with an average annual income of $2.0 million, spend an estimated 8.7% of their incomes on state and local taxes.
“It’s a matter of values,” Rep. Ro Khanna (D-Fremont) posted on X. “We believe billionaires can pay a modest wealth tax so working-class Californians have Medicaid.”
Many have argued losing all that wealth to other states will hurt California in the long run.
Even Gov. Gavin Newsom has argued against the measure, citing that the wealthy can relocate anywhere else to evade the tax. During the New York Times DealBook Summit last month, Newsom said, “You can’t isolate yourself from the 49 others. We’re in a competitive environment.”
He has a point, as do others who contend that the proposed tax may hurt California rather then help.
Sacks signaled he was leaving California by posting an image of the Texas flag on Dec. 31 on X and writing: “God bless Texas.” He followed with a post that read, “As a response to socialism, Miami will replace NYC as the finance capital and Austin will replace SF as the tech capital.”
Arguments aside, it’s disturbing to think that some of the richest people in the nation would rather pick up and move than put a small fraction of their vast California-made — or in the case of the burger chain, inherited — fortunes toward helping others who need a financial boost.
Source link
How California has Trump-proofed some federal funding for the homeless
When Virginia Guevara moved into a studio apartment in Orange County in 2024 after nearly a decade of homelessness, she needed far more than a roof and a bed.
Scattered visits to free clinics notwithstanding, Guevara hadn’t had a full medical checkup in years. She required dental work. She wanted to start looking for a job. And she was overwhelmed by the maze of paperwork needed simply to get her off the street, much less to make any of the other things happen.
But Guevara had help. The Jamboree Housing Corp., an affordable-housing nonprofit that renovated a former hotel in Stanton that Guevara now calls home, didn’t just move her in — it also provided her a fleet of wraparound services. Jamboree counselors helped Guevara navigate the healthcare system to see a doctor and a dentist, buy a few things for her apartment, and get training to become a caregiver.
“I was years on the street before I got the kind of help I needed so I could help myself,” said Guevara, 68.
Amid the Trump administration’s apparent opposition to using Medicaid funding for such social services, staffers at Jamboree and similar affordable-housing providers in California have feared losing federal money. The experimental waivers that provide the primary funding for the program expire at the end of 2026. But as it turns out, the state had the foresight several years ago to designate certain nonhousing social services — such as mental health care, drug counseling and job training — as a form of Medicaid spending that will continue to be reimbursed.
Catherine Howden, a spokesperson for the federal Centers for Medicare & Medicaid Services, confirmed that California’s use of the “in lieu of services” classification for these wraparound programs is allowed under federal regulations.
“It is starting to sound positive that we will, at the very least, be able to continue billing for these services after the waiver period,” said Natalie Reider, a senior vice president at Jamboree Housing.
During President Trump’s first term, states were permitted to use Medicaid money for social support services not typically covered by health insurance. But the second Trump administration is reeling that policy back in, saying that the intervening Biden administration took the supportive services process too far. Howden said in a statement that the policy “distracted the Medicaid program from its core mission: providing excellent health outcomes for vulnerable Americans.”
Through CalAIM, a five-year experimental build-out of the Medicaid system, programs such as Jamboree were able to leverage federal funding to offer the kinds of nonhousing social services that experts contend are essential to keeping people permanently housed.
However, these wraparound services are only one component of the CalAIM initiative, which is attempting to take Medicaid, known as Medi-Cal in California, in a more holistic direction across all areas of care. And when CalAIM launched, California officials gave the programs the Medicaid “in lieu of services” designation, known as ILOS, in effect putting them outside the waiver process and ensuring that even when CalAIM sunsets, money for those social initiatives will continue to flow.
“California has tried to future-proof many of the policy changes it has made in Medi-Cal by including them in mechanisms like ILOS that do not require federal waiver approval,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News. “That allows these policy changes to continue, even with a politically hostile federal administration.”
The designation allows these social services to be funded through Medicaid managed-care plans under existing federal laws because they are cost-effective substitutes for a Medicaid service or reduce the likelihood of patients needing other Medicaid-covered healthcare services, said Glenn Tsang, policy advisor for homelessness and housing at the state’s Department of Health Care Services. The state could not provide an estimate of the annual funding for these wraparound services because they are not distinguished from other payments made to Medicaid managed-care plans.
“We are full steam ahead with these services,” Tsang said, “and they are authorized.”
Although California was the first state to incorporate the designation for such housing and other health-related social support, Tsang said, several other states — including Arizona, Arkansas, Florida, New York and North Carolina — are now using the mechanism in a similar fashion.
Paul San Felipe, senior program manager for Jamboree, speaks during a meeting at Clara Vista in Stanton on Dec. 29, 2025.
(Eric Thayer / Los Angeles Times)
Early results suggest such support saves on healthcare spending. When Jamboree, MidPen Housing Corp. in Northern California, RH Community Builders in the Central Valley and other permanent supportive housing providers employ a holistic approach that includes social services, they reported higher rates of formerly homeless people remaining in housing, less frequent use of costly emergency health services, and more residents landing jobs that help them pay rent and stay housed.
At the nonprofit MidPen Housing, which serves 12 counties in and around the San Francisco Bay Area, roughly 40% of the units in the program’s pipeline are earmarked for “extremely low-income” people, a group that includes those who are homeless, said Danielle McCluskey, senior director of resident services.
CalAIM reimbursements help fund the part of MidPen that focuses on supportive services across a wide range of experiences, such as chronic homelessness, mental health issues and those leaving the foster care system. McCluskey described it as one leg of a three-legged stool, the others being real estate development and property management.
“If any of those legs are not getting what they need, if they’re not funded or not staffed or resourced, then that stool is kind of wobbly — off-kilter,” the director said.
A recent state evaluation found that people who used at least one of the housing support services — including navigation into new housing, healthcare assistance and a deposit to secure an apartment — saw a 13% reduction in emergency department visits and a 24% reduction in inpatient admissions in the six months that followed.
Documenting those outcomes is crucial because the department needs to show federal officials that the services lessen the need for other, often costlier Medicaid-covered care — the essence of the classification.
Advocates for the inclusion of supportive services argue that the American system ultimately saves money on those investments. As California’s homeless population has soared in recent years to more than 187,000 on a given night — nearly a quarter of the U.S. total — Jamboree has been allocating more of its resources to permanent supportive housing.
Founded in 1990 in Orange County, Jamboree builds various types of affordable housing using federal, state and private funding. Reider said about a fifth of the organization’s portfolio is dedicated to permanent supportive housing.
“They’re not going back out to the streets. They’re not going to jail. They’re not going to the hospitals,” Reider said. “Keeping people housed is the No. 1 outcome, and it is the cost-saver, right? We’re using Medicaid dollars, but we’re saving the system money in the long run.”
Guevara spent years living out of her truck before a shelter worker connected her with Jamboree. Now she also has found work as a caregiver.
(Eric Thayer / Los Angeles Times)
Guevara, who wound up on the streets after a falling-out with family in 2015, spent years living out of her truck before a shelter worker connected her with Jamboree. There, she was paired with a specialist to help her figure out how to get and see a doctor, and to keep up with scheduling the battery of medical tests she needed after years spent living in temporary shelters.
“I also got a job developer, who helped me get this job with the county so I can pay my rent,” Guevara said of her position as a part-time in-home caregiver. “Now I take care of people kind of the same way people have been taking care of me.”
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — the independent source for health policy research, polling, and journalism.
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