It was hardly a surprise when California billionaires revolted last year at a groundbreaking ballot proposal to tax their assets. Some left the state. Others tried to kill the tax by pouring millions of dollars into political advertising and competing ballot measures.

But now opposition is emerging from a far more surprising corner. Healthcare organizations and education groups that typically support higher taxes are rallying against the initiative just days before a deadline to remove it from the November ballot.

The new effort, which was to be announced Wednesday, comes from advocacy groups representing California doctors, health clinics and school boards. The organizations are seeding their campaign with $200,000, according to a spokesperson, and are running a digital ad that blasts the measure as a “reckless wealth tax experiment.”

The groups say the onetime nature of the billionaire tax does not address their long-term funding needs. They also fear that the wealth tax would threaten their efforts to pass a tax that would generate a steadier stream of revenue.

“The very folks that it’s supposed to help aren’t supporting it,” said Francisco Silva, president of the California Primary Care Association, which represents health clinics.

The new campaign is believed to be the first political spending against the tax that is not from the wealthy people who would have to pay it. It is also the most visible sign yet that the proposed billionaire tax would scramble traditional alliances if it reached the ballot this fall.

The tax proposal is backed by a labor union, Service Employees International Union-United Healthcare Workers West, and is expected to qualify for the ballot this week. It calls for a one-time, 5% tax on the assets of California billionaires to offset healthcare cuts that President Donald Trump signed into law last year. The state would be required to spend 90% of the new revenues on healthcare and the rest on food assistance and education.

The initiative has already divided Democrats and labor unions. Gov. Gavin Newsom, who says taxing billionaires would hurt California’s dominance as the cradle of tech innovation, is trying to pull it off the ballot before a June 25 deadline.

The negotiations are complex. A grand compromise could involve several other ballot measures on taxes and healthcare already headed for the November ballot, as well as potential tax increases that the Legislature could approve as part of the state budget.

The healthcare workers union pushing for the tax said the school boards association was “carrying water for a few of the world’s most controversial billionaires” and criticized the groups representing doctors and clinics.

“Their complicity with billionaires at the expense of patient interests is no surprise,” Suzanne Jimenez, chief of staff for the SEIU-UHW, said in a statement.

The campaign for the billionaire tax debuted earlier this year with rousing support from Sen. Bernie Sanders, I-Vt., who cast it as a righteous move to address income inequality and pay for healthcare. Tapping into populist angst, the union gathered 1.5 million signatures and received endorsements from the Teamsters and AFSCME unions.

But most Democrats who ran for governor this year opposed the tax, including Xavier Becerra, who is in a strong position to win as the only Democrat to reach the general election. Becerra said that wealthy Californians have not paid their fair share but that the state needed a predictable tax structure.

In recent weeks, many new opponents have emerged after Newsom worked behind the scenes to try to isolate the healthcare workers union. They include progressive groups such as the California Teachers Association and Planned Parenthood, as well as housing organizations, a hospital association and unions representing construction workers and police officers. The common thread among the diverging interests is fear that a one-time tax would hurt the state’s long-term finances.

“What we are looking for is stable, ongoing and durable revenue,” said Dustin Corcoran, CEO of the California Medical Association, which represents doctors and is a funder of the new opposition campaign.

The doctors’ association and the teachers union are supporting a different ballot measure that would make permanent a tax increase on high earners that is set to expire in 2030. Supporters fear that voters might reject it if too many tax proposals are on the ballot.

Any deal to quash the billionaire tax would likely include an agreement to raise taxes in other ways for healthcare. On Monday, the state Assembly passed two bills that could become part of a deal. One would raise $1.4 billion next year by limiting corporate tax credits and extending a software tax. The other would change how California taxes managed-care health plans.

If the billionaire tax heads to the ballot this fall, Newsom’s office hopes that voters will see that many Democratic allies oppose it.

“This is not going to be, ‘Billionaires killed this wealth tax’ if it appears on the November ballot,” said Nathan Barankin, Newsom’s chief of staff. “It’s going to be Planned Parenthood, doctors, teachers and labor killed it.”

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This article originally appeared in The New York Times.

By Laurel Rosenhall/Karsten Moran
c. 2026 The New York Times Company