Backers of California's billionaire tax didn't just lose their own campaign on Tuesday. The counter-measure written to stop them appears to be passing too. CalMatters reported that Proposition 42, which bans new taxes on personal property such as business holdings, intellectual property and financial assets, was leading 54% with nearly 60% of expected votes counted.
Proposition 40 would have charged a one-time 5% tax on the assets of Californians worth more than $1 billion. SEIU-United Healthcare Workers West put it on the ballot to replace federal health funding cut under the One Big Beautiful Bill. SFist reported it was trailing 55% to 44% on Wednesday morning. A second counter-measure, Prop. 41, was also trailing.
CalMatters reported that Prop. 42 was mostly funded by billionaires, who put $159 million into it. Public safety unions, including California Professional Firefighters, promoted it as protection for pensions and retirement accounts, and Gov. Gavin Newsom endorsed it. The nonpartisan Legislative Analyst's Office says it will make it harder for state lawmakers to raise taxes in the future.
Wealth-tax supporters say they will keep trying. "We're going to tax them the way they need to be taxed," said Rep. Ro Khanna of Santa Clara, a lead supporter of Prop. 40. The ban is not permanent, and voters could undo it with another measure later. "That's not set in stone," said California Labor Federation president Lorena Gonzalez.
Senate Budget Committee Chair John Laird, a Santa Cruz Democrat, told CalMatters he had never imagined Prop. 42 would pass on its own. The state has run deficits four years in a row, and federal Medicaid cuts will put pressure on Gov.-elect Xavier Becerra. Becerra opposed the billionaire tax.
Vote counts cited here are unofficial. Bay Area counties are still processing mail and provisional ballots, and results are not certified until later this month, so margins can change.