California Unions Propose Billionaires Tax to Offset Medicaid Cuts, Fund Healthcare and Education

A coalition led by the Service Employees International Union (SEIU) is proposing a one-time 5% tax on California billionaires to address massive federal Medicaid cuts enacted under President Donald Trump's administration, which threaten healthcare and education funding in the state. The initiative, called the 2026 Billionaire Tax Act, targets roughly 200 billionaires and aims to generate about $100 billion to offset projected losses of up to $30 billion annually in federal Medicaid funding, which could result in millions losing coverage and healthcare job cuts. Proponents argue the tax is necessary to prevent hospital closures, maintain healthcare services, and support K-12 education, with 90% of funds earmarked for healthcare. The measure requires over 870,000 signatures to qualify for the 2026 ballot, and while supporters are confident in gathering enough signatures, Governor Gavin Newsom has historically opposed tax hikes on the wealthy, making the initiative's passage uncertain. Critics warn the tax could prompt billionaires to leave California, potentially decreasing general state revenue and complicating budget priorities. Nonetheless, organizers view the effort as a critical response to federal funding cuts and hope it could serve as a model for other states facing similar Medicaid reductions.