Fresno Voters to Decide on Billionaire Tax as State Budget Tensions Rise

Fresno voters will decide this November whether California’s wealthiest residents should pay more to stabilize the state’s healthcare system — a question now headed to the ballot as Proposition 40 after Governor Gavin Newsom failed to broker a deal to stop it.

The measure would levy a one-time 5% tax on California residents with more than $1 billion in net worth. Dave Regan, president of SEIU United Healthcare Workers West, which is backing the initiative, says the revenue is needed to cover an estimated $20 billion annual shortfall caused by federal healthcare cuts approved by President Donald Trump and Republicans last year.

Legislative analysts predict up to two million Californians could lose Medi-Cal coverage because of the federal law, H.R. 1, threatening the bottom line of hospitals that rely on that revenue.

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“The only thing that [Newsom] communicated clearly to us was that he would not consider any tax on billionaires,” Regan told The Sacramento Bee, accusing the governor of failing to propose any alternative ahead of the June 25 deadline for withdrawing ballot measures.

Newsom and business groups argue the wealth tax will drive away high earners, on whom the state heavily relies for tax revenue to balance its budget. Rob Lapsley, president of the California Business Roundtable, accused Regan of making “extremely unrealistic” demands and said opponents are already preparing legal strategies to stop the tax if voters approve it.

The fight is ramping up amid rising frustration from Democratic voters over the party’s platform. In recent congressional primaries in California’s Central Valley and elsewhere, Democratic voters have elevated progressive candidates who made economic populism central to their campaigns.

A May poll by the Public Policy Institute of California found 54% of likely voters backed the measure, with strongest support among Democrats (more than three-quarters), voters under 45, renters, and lower-income Californians. Support was weakest among Republicans, white voters, and people living in the Central Valley.

Critics have formed multiple groups to counter the tax, including ones backed by Newsom, Google co-founder Sergey Brin, and Bay Area billionaire Chris Larsen. Lapsley said those groups are now coordinating messaging and strategy, planning to argue the tax will chase employers out of state and force them to pass costs to consumers — the same playbook that defeated a 2020 commercial-property tax measure.

The measure allows the Legislature to alter the tax with a two-thirds vote “if the statute is consistent with and furthers the purposes of the 2026 Billionaire Tax Act.” Critics argue that language opens the door to far broader tax changes; Regan dismissed the claim as a misreading of the measure’s text.

Several major unions, including the California Teachers Association and State Building and Construction Trades Council of California, have come out against Proposition 40, citing fears about long-term state revenue. Regan predicted most unions would eventually join his fight and argued that skeptics like Newsom and the CTA are “out of step with their own constituents and their own members.”

The Breakdown

• Proposition 40 would impose a one-time 5% tax on California residents with more than $1 billion in net worth
• Backers say the revenue is needed to cover an estimated $20 billion annual shortfall caused by federal healthcare cuts — legislative analysts predict up to two million Californians could lose Medi-Cal coverage because of the federal law
• Governor Newsom and business groups oppose the measure, arguing it will drive wealthy residents out of state and harm long-term state revenues
• A May poll found 54% of likely voters supported the measure, with strongest support among Democrats, voters under 45, renters, and lower-income Californians — support was weakest in the Central Valley
• The measure allows the Legislature to alter the tax with a two-thirds vote as long as changes are “consistent with and further the purposes” of the original act

What This Means for You

This November, Fresno voters will vote on whether California’s billionaires should help cover the cost of federal healthcare cuts — or whether that approach risks making the state’s budget problems worse. Your vote on Proposition 40 is a direct choice between two competing views of how to respond to federal policy that analysts say will strip Medi-Cal coverage from up to two million Californians, including residents here in Fresno and across the Central Valley.

The question isn’t just about taxes on the ultra-wealthy — it’s about what happens when the federal government cuts funding for a program your local hospital depends on, and whether the state can replace that money without driving away the taxpayers it counts on to balance the budget. How you vote will shape whether your state representative has the option to adjust this tax in the future, and whether California tries to make up federal cuts with new state revenue or accepts those cuts as permanent.

What You Can Do

Proposition 40 will appear on your November ballot. You can register to vote or check your registration status at registertovote.ca.gov.

What to Watch

Poll numbers show this measure starts with majority support — but California ballot measures historically have an easier time losing than winning once the “no” campaign starts spending. The 2020 commercial-property tax measure started at 51% support in September polling and ended with 51% of voters casting ballots against it, after business groups argued it would chase employers out of state and raise costs for consumers.

Opponents of Proposition 40 are already using that same playbook, and they’ve got the money to run it: groups backed by Newsom, Google co-founder Sergey Brin, and Bay Area billionaire Chris Larsen are coordinating strategy and have already spent $10 million on voter contact, including mailers prominently featuring Newsom’s opposition. One group is bankrolling two counter-measures aimed at undermining the billionaire tax.

The real question is whether “tax the billionaires” is a simpler, more popular message than “split the commercial property tax roll” was in 2020 — or whether voters will be persuaded that the risk to state revenues outweighs the appeal of a one-time tax on the ultra-wealthy. Early polling shows the strongest opposition to this measure is here in the Central Valley, even as Democratic voters elsewhere in the state are elevating economic-populist candidates in congressional primaries.

Also worth watching: how many labor unions end up actively supporting this measure. The union behind it, SEIU-UHW, didn’t collaborate with some of the labor movement’s biggest players, and several major unions — including the California Teachers Association — have come out against it, citing the same long-term revenue fears Newsom has raised. If most unions don’t eventually join the fight, as the measure’s backers predict they will, that’s a sign the “no” side’s argument about state-revenue risk is landing with more than just business groups.