The Facts

The billionaire tax qualified for the ballot this week, but with just 54% of voters indicating support, the union backing the measure is trying to negotiate a lower rate in exchange for Newsom's support, according to Sophie Austin at The Associated Press.

They have until 5 p.m. on June 25, the deadline to certify or withdraw the measure, to find a negotiated deal. Any deal would have to be passed by the legislature.

The Context

The Legislative Analyst's Office says the original 5% version could raise tens of billions of dollars over several years, with 90% earmarked for health care and 10% for food assistance or education-related programs. But it also warns California could lose hundreds of millions of dollars or more in annual income-tax revenue if wealthy residents leave.

Negotiations between Newsom's office and the union have been ongoing for weeks. This week, odds of the measure appearing on the November ballot collapsed on Polymarket, possibly indicating someone with inside knowledge knew a deal had been reached. That ended up not being the case.

The GrowSF Take

Standard advice among political operatives is that you want your ballot measure to be winning with at least 60% before Election Day. So with just 54% expressing support in a May poll, the union must be feeling uneasy.

We hope this large-scale asset seizure is withdrawn. Everyone should pay their fair share, and sustainable tax policy requires that tax rates are stable, predictable, not punitive, and hard to game. Policies like a one-time asset seizure tell entrepreneurs: don't build your company here. Some billionaires have already left the state, and more are likely to follow, whether or not the seizure ultimately ends up legal or not. This will have a big negative impact on tax revenues, innovation, and the broader economy.

California should focus on delivering the basics with a reasonable budget instead of chasing one-time wealth grabs that could push out the tax base we already depend on.