A pivotal proposal was unveiled on Thursday by a significant union, suggesting a one-time 5% tax on California’s billionaires. This initiative aims to counteract the federal government’s reductions in funding for healthcare services provided to low-income individuals.

The Service Employees International Union, among other advocates, is pushing to have this measure presented to California voters in the upcoming year. The proposed tax would affect the net worth of the state’s wealthiest citizens. Additionally, a portion of the revenue would be allocated to K-12 education, especially in light of federal threats to cut grants for public schools.

Supporters have reached out to Attorney General Rob Bonta, seeking approval to begin the signature collection process. To make it onto the November 2026 ballot, the proposal requires over 870,000 signatures by the spring deadline. Even if it qualifies, passage is uncertain, particularly as Governor Gavin Newsom has historically resisted tax increases, including those aimed at wealthy individuals.

Advocates stress the urgency of compensating for Medicaid funding cuts, highlighting the potential risk to public health.

“Failure to act could result in millions losing access to healthcare, leaving countless individuals untreated and leading to repeated tragedies,” warned Dave Regan, president of SEIU-United Healthcare Workers West.

Billionaires would have to pay for tax year 2026, and the money could start being appropriated in 2027. The tax would generate $100 billion in revenue for the state, backers say. The initiative says it’s “designed to make the State tax system more equitable.”

The big tax and spending cuts law President Donald Trump signed earlier this year will cut more than $1 trillion over a decade from Medicaid and federal food assistance.

The California Budget and Policy Center, a think tank in Sacramento, estimated the state could lose $30 billion in federal funding a year for Medicaid, which would result in up to 3.4 million people losing their coverage.

Newsom said earlier this month that people enrolled in Covered California, the state’s health insurance marketplace, could see their monthly health care bills nearly double next year as a result of the spending cuts law.

“California has led the nation in expanding access to affordable health care, but Donald Trump is ripping it away,” he said.

Proponents of the proposed ballot initiative say billionaires have an obligation to do their part.

“We hope that some and perhaps hopefully a large number of billionaires will recognize that it’s important in the state where they’ve grown their fortune that they have a responsibility to society to preserve the future of California,” said Emmanuel Saez, a professor of economics at the University of California, Berkeley.