California voters rejected Proposition 40 on Monday, halting a high-stakes bid to impose a 5% wealth tax on resident millionaires and billionaires and leaving state lawmakers scrambling to plug massive health-care budget holes.
The measure failed with 52.8% of the vote against 47.2% in support, according to results confirmed by Associated Press. The proposal had lagged in early tallies following the November elections as the Registrar of Voters processed ballots.
SEIU-UHW Leaders Vow to Fight for Funding in 2028
The Service Employees International Union-United Healthcare Workers West drove the initiative, arguing the levy would raise 100 billion dollars for public education and health care. Leaders conceded defeat shortly before the final count emerged.
“That is not a hypothesis. That is our plan,” said Dave Regan, president of SEIU-UHW, vowing to bring the fight back to the ballot in 2028 if the California Legislature fails to secure alternative funding for medical services.
Voters also rejected Proposition 44, another union-backed measure that sought to control clinic expenditures. Meanwhile, the industry-backed Proposition 42 led with 51.6% of the vote, establishing a safeguard that could block future wealth tax attempts.
Democratic Leaders and Tech Figures Oppose Proposition 40
The push tore through the California Democratic Party, drawing fierce opposition from Governor Gavin Newsom and prominent tech figures. Opponents framed the tax as an economic hazard that would drive capital and taxpayers out of the state.
“The Proposition 40 was a reckless experiment carried out on our state’s economy with little regard for the damage it would cause,” said Evan Westrop, campaign strategist for the opposition, in an official statement.
Google co-founder Sergey Brin led tech opposition by relocating outside the state and directing 102 million dollars to the political committee Building a Better California. In total, wealthy opponents injected 378.4 million dollars into defeating the measure, vastly outpacing the 33.5 million dollars raised by the “Yes on 40” campaign.
| Ballot Measure | Stance | Vote Share | Key Backers |
|---|---|---|---|
| Proposition 40 | Rejected | 47.2% Yes / 52.8% No | SEIU-UHW, Labor Federation |
| Proposition 42 | Leading | 51.6% Yes / 48.4% No | Tech Investors, Governor Newsom |
| Proposition 44 | Rejected | Defeated on Election Day | SEIU-UHW |
“That is incredibly corrosive and corruptor for our democracy and our political system, and has been the dominant theme in the debate here in California,” Regan told Associated Press regarding the spending disparity.
Legislative Pressure After the Loss
Abby Lunardini, spokesperson for Building a Better California, called the outcome a double loss avoided for the state.
“It was a lose-lose proposition for California, and voters clearly agreed,” Lunardini said.
Lorena González, president of the California Labor Federation, warned that the defeat places immediate strain on state and federal lawmakers to address looming Medicaid funding cliffs that threaten health coverage for two million residents.
Earlier coverage: California Voters Reject Proposition 40 Billionaire Tax
