California Union Offers Lower Rate on Billionaire Tax Measure After Ballot Qualification

A labor union behind a proposed one-time tax on California billionaires offered Thursday to reduce the rate from 5% to 2% if state officials back the revised plan. The Service Employees International Union Healthcare Workers West said it would abandon the 5% tax if officials joined in supporting the lower levy.

The updated proposal would need to pass the Legislature by a June 25 deadline to appear on the ballot.

The original measure would have imposed the 5% tax on individuals whose net worth exceeds $1 billion and who lived in the state as of Jan. 1, 2026. Backers estimated it would generate $100 billion, with most of the money directed toward offsetting federal cuts to healthcare for low-income residents and some funds allocated to food assistance and education programs.

A spokesperson for the governor said scaling back the rate does not change the measure’s “fundamental flaws that harm working Californians.” The same statement said the proposal would defund teachers, schools, clinics, and public safety.

The nonpartisan Legislative Analyst’s Office estimated the 5% tax would generate tens of billions of dollars in the first few years but that income-tax collections could later decline by hundreds of millions of dollars annually. State lawmakers passed budget bills this week that raise revenue through other means, including an extension of a tax on healthcare providers.

Senate President pro Tempore Monique Limón said the budget does not include the billionaire tax and instead reflects additional revenues to address the state’s long-term structural deficit.

A political committee opposing the tax has raised more than $118 million, including an $82 million contribution from Google co-founder Sergey Brin. The California Medical Association and California School Boards Association launched a committee this week urging voters to reject the measure if it reaches the ballot.