In a bold move that could reshape California’s healthcare landscape, a major labor union is proposing a groundbreaking ballot measure that would impose a one-time 5% tax on billionaires to combat devastating federal funding cuts to Medicaid.

The Service Employees International Union (SEIU) is leading the charge to protect low-income residents from losing critical health coverage. According to projections by the California Budget and Policy Center, the state could lose up to $30 billion in federal funding annually, potentially leaving 3.4 million people without healthcare access.

Union leaders and economic experts argue that billionaires have a social responsibility to support the communities where they’ve built their fortunes. “We hope that billionaires will recognize their obligation to preserve California’s future,” said Emmanuel Saez, an economics professor at UC Berkeley.

The proposed initiative would generate approximately $100 billion in revenue, with funds allocated to backfill Medicaid cuts and partially support K-12 education. Billionaires would pay the tax for the 2026 tax year, with funds becoming available in 2027.

Governor Gavin Newsom has been vocal about the potential healthcare crisis, stating that individuals on Covered California could see their monthly health insurance premiums nearly double due to federal spending cuts.

To qualify for the November 2026 ballot, the measure must collect over 870,000 signatures by next spring. While the proposal aims to create a more equitable tax system, its passage is not guaranteed, especially given Newsom’s historical opposition to targeted tax increases.

Dave Regan, president of SEIU-United Healthcare Workers West, emphasized the human stakes: “If we do not act, millions will lose health coverage, and we’ll see tragedy after tragedy”.

As federal policies threaten to dismantle healthcare access, this proposed tax on billionaires represents a potential lifeline for California’s most vulnerable populations, highlighting the ongoing battle for affordable healthcare in the United States.