A Primer: The Labor and Public-Interest Coalition Against Prop 40
A union wrote California’s wealth tax and marketed it as a way to fix healthcare and schools. But the teachers, doctors, clinics, and officers it names as beneficiaries are now fighting to kill it.
TL;DR
Prop 40’s wealth tax would levy a one-time 5% tax on roughly 200 billionaires to fund healthcare and schools—yet the teachers, doctors, clinics, builders, housing advocates, and law-enforcement groups it claims to help have joined to oppose it. They argue that a one-time, volatile tax makes their funding less stable, not more. The state’s own analyst projects it would cost California income-tax revenue over time.
Proposition 40 is sold as a rescue for healthcare and schools. Its critics say it is the opposite: a one-time, retroactive tax on a base California cannot count on, built to fund permanent needs with money that shows up once and then leaves a hole.
That critique does not come from the wealthy Californians who would pay it. It comes from the state’s nonpartisan budget referee and from the workers the measure names as its beneficiaries. The Legislative Analyst’s Office found the wealth tax would likely produce an ongoing decrease in state income-tax revenue, hundreds of millions of dollars a year, as some of the roughly 200 affected residents relocate. The California Medical Association warned the measure would deliver more budget instability, not less, and could mean less funding for health care, not more. The president of the California Primary Care Association put it bluntly: the very folks it is supposed to help are not supporting it.
That is the paradox at the center of Prop 40, and the subject of this primer: a union-written wealth tax meant to fund healthcare and schools, opposed by a remarkable coalition of the healthcare workers, teachers, clinics, builders, housing advocates, and public-safety groups it was supposed to help.
What the Measure Does
On the November 3, 2026 ballot, Proposition 40 would impose a one-time 5% tax on the net worth of California residents worth more than $1 billion, roughly 200 people. Its sponsor estimates it would raise about $100 billion, with 90% directed to state healthcare programs like Medi-Cal and 10% to food assistance and public education.
The wealth tax was written and funded by a labor union, SEIU-United Healthcare Workers West, which spent $31 million gathering 1.6 million signatures to qualify it, with the stated purpose of backfilling federal Medicaid cuts. One design choice shapes the whole fight: the tax applies to anyone who was a California resident as of January 1, 2026, a retroactive date set months before voters weigh in. For the full mechanics, there is a clear breakdown of how the tax would work.
Teachers and Schools
California Teachers Association, the largest teachers union in the state with more than 300,000 members, voted to oppose through its 800-delegate State Council. The union said the measure will not provide the sustainable and long-lasting funding that schools and communities deserve, and noted it would rather extend the existing income taxes on high earners that already fund schools. CTA is emphatic that it supports taxing the wealthy; it just does not believe this is the way.
The California School Boards Association joined a joint statement with medical groups warning that the wealth tax “directly threatens vital funding for education and schools, healthcare and clinics, public safety, and infrastructure projects by making California’s revenue even more volatile.”
Doctors and Clinics
California Medical Association, representing the state’s physicians, voted to oppose. It warned the measure would bring more instability, not less, and made a striking prediction: because it deepens California’s reliance on a volatile revenue base, it “may result in less funding for our general fund and therefore less funding for health care.”
California Primary Care Association, which represents community health clinics, opposes it. Its president, Francisco Silva, said the very folks the measure is supposed to help are not supporting it. The clinics, doctors, and school boards even seeded a joint campaign against the measure, forming a diverse coalition.
Planned Parenthood Affiliates of California opposes it, a genuine surprise given how rarely it breaks with its usual allies. CEO Jodi Hicks said the group is “not taking a position because we agree with any of the billionaires,” but opposes because the one-time structure does not meet long-term funding needs and could jeopardize a steadier revenue measure it prefers.
The California Children’s Hospital Association and community providers round out the healthcare opposition, all among the groups publicly on record against the measure.
Builders and the Trades
The State Building and Construction Trades Council of California, which represents the carpenters, electricians, and laborers who build the state, came out against the measure in June, among the first major labor organizations to break ranks. Its president, Chris Hannan, was direct about why: a retroactive tax would drive people and investment out of the state, costing members jobs and the general fund revenue.
The carpenters agree. Pete Rodriguez, vice-president of the United Brotherhood of Carpenters, said the measure would drive employers, jobs, and capital out of California, adding that carpenters believe in a fair tax system that supports working people, and “this measure does neither.” The California Conference of Carpenters is likewise on record opposed.
Housing Advocates
California YIMBY, the state’s leading pro-housing organization, took the unusual step of formally opposing the measure. Its leaders, CEO Brian Hanlon and director Noah Ornstein, called the wealth tax “anti-housing in its structural and psychic effects.” Their central objection is technical: the measure exempts directly held property but taxes property held through business entities, which is precisely how housing gets financed and built, through LLCs, limited partnerships, and joint ventures. In their words, the design rewards “the only ownership structure that doesn’t contribute to housing production, while penalizing every structure that does.”
YIMBY also warns the measure would chase away the family-office capital that increasingly finances construction and signal to national investors that California is the wrong place to put money to work. The group is careful to note it is not anti-tax; it backed the 2020 split-roll effort to reform Prop 13. Its verdict on this instrument: progressive, yes, but not good policy.
Affordable-housing groups line up the same way. Ray Pearl of the California Housing Consortium warned the measure “only compounds the volatility, adding uncertainty to both the economy and state budget” while narrowly dictating how the money can be spent. The California Council for Affordable Housing agrees a wealth tax risks pushing capital, jobs, and housing investment out of California at the worst possible moment for the state’s housing shortage.
Public Safety
Law enforcement is in the coalition too. The Peace Officers Research Association of California (PORAC), which represents roughly 90,000 California peace officers, is listed among the organizations opposed to the measure. The concern tracks the rest of the coalition: a volatile, one-time revenue source is no foundation for the public-safety and infrastructure budgets that depend on stable funding. Governor Newsom’s office has framed its own opposition the same way, warning the measure would “defund teachers, schools, clinics, and public safety.”
The Unifying Argument
Strip away the politics and every group here is making the same technical case. California’s budget already swings hard on capital-gains revenue from its wealthiest residents. A one-time tax on a few hundred people who can, and some already did, relocate does not stabilize that base; it strains it further. The nonpartisan Legislative Analyst’s Office found the measure would likely produce an ongoing decrease in state income-tax revenue of hundreds of millions of dollars a year. For institutions that live on predictable public funding, a source that spikes once and then leaves a hole is not a rescue. It is a risk.
What Happens Next
Voters decide on November 3. Public polling has shown only soft and shifting support, with several June surveys putting the measure near or below 50%. However the vote breaks, Prop 40 has already done something unusual: it split the coalition that normally unites to tax the wealthy, and put teachers, doctors, clinics, builders, housing advocates, and public-safety officers on the same side of a ballot fight. When the people closest to the work read the fine print and say no, that is worth understanding.
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