The union behind California’s billionaire tax is blinking, but Gavin Newsom wants to inflict total defeat

A labor union behind a controversial tax on California billionaires significantly scaled back its proposal a day after it qualified for the November ballot, but the offer Thursday wasn’t enough to get the governor on board.

The proposal from the Service Employees International Union Healthcare Workers West to impose a one-time, 5% tax on individuals whose net worth exceeds $1 billion faces staunch pushback from a wide swath of critics, including Democratic Gov. Gavin Newsom. The union said Thursday that it would abandon the 5% tax proposal if Newsom would join them in supporting a 2% levy. The updated proposal would instead have to be passed by the Legislature, given a June 25 deadline for the measure to qualify for the ballot.

Tara Gallegos, a spokesperson for Newsom, said scaling it back doesn’t change its “fundamental flaws that harm working Californians.”

“The Governor supports making the wealthiest Americans pay their fair share, but this poorly designed state-only measure will defund teachers, schools, clinics, and public safety,” she said in a statement.

The tax, to be paid by those living in the state as of Jan. 1, 2026, is meant to generate $100 billion in revenue, mainly to counter federal cuts to healthcare for low-income people with some money going to food assistance and education programs.