SACRAMENTO, Calif. — On Thursday, a significant union proposed a one-time 5% tax on California’s billionaires to counteract recent federal cuts to healthcare funds for low-income residents.

The initiative, supported by the Service Employees International Union among others, aims to bring this measure before California voters next year. This tax would target the wealthiest Californians and also allocate some funds to bolster K-12 education, addressing potential federal threats to withdraw grants from public schools.

This week, supporters submitted a request to Attorney General Rob Bonta to begin gathering signatures. To qualify for the November 2026 ballot, over 870,000 signatures must be collected by next spring. However, even if it qualifies, passage is uncertain—Governor Gavin Newsom, a Democrat, has previously opposed tax increases aimed at the wealthy.

Advocates argue that restoring Medicaid cuts is essential as it affects millions who depend on these services.

“Without this action, millions could lose their healthcare, countless individuals will miss necessary treatments, resulting in numerous tragedies,” stated Dave Regan, president of SEIU-United Healthcare Workers West.

The proposed tax would apply to the fiscal year 2026, with funds becoming available in 2027. Proponents estimate it could raise $100 billion, claiming the initiative aims to make the state’s tax system fairer.

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.