Official title: Imposes One-Time Tax on Certain Taxpayers. Initiative Constitutional Amendment and Statute.
The opening explanation says this initiative adds a section to the California Constitution and amends and adds sections to the Government Code and Revenue and Taxation Code. New provisions appear in italics.
Specifically: Article XIII §37; Government Code Article 1.1 beginning at §16355; Revenue and Taxation Code §17220 and Part 27 beginning at §50300. This is citizen initiative 25-0024A1, rather than a bill with an SB or AB number. The official PDF begins with the end of Proposition 39; Proposition 40 starts on printed page 134.
Creates a one-time tax of up to 5% on covered wealth, based on California residency on January 1, 2026. Wealth is assets minus allowable debts, rather than annual income. The base excludes directly held real estate and generally excludes qualified pensions, with exceptions for some retirement arrangements.
Proposition 40 · Initiative 25-0024A1 · Revenue & Taxation Code §§50301–50303, 50308 ↗Enacts this tax and its special-fund spending rules, subject to legal challenges and possible conflicts with other measures.
Does not enact the tax or the new spending fund. Existing taxes and funding rules continue.
Collections would span several years. The LAO also estimates a possible ongoing income-tax revenue reduction below $1 billion annually and administrative costs of tens of millions annually for several years. Asset prices, taxpayer responses, and implementation affect outcomes.
Read the nonpartisan fiscal analysis ↗Tax payments begin in 2027. Five equal annual installments are available with a 7.5% yearly charge on the unpaid balance. Optional deferral accounts for qualifying assets add further rules; this overview is not a personal tax calculation.
Proposition 40 · Initiative 25-0024A1 · Revenue & Taxation Code §§50301(c), 50304 ↗Receipts, interest, and penalties, less refunds, enter a separate Treasury reserve fund. Administration is paid before the remaining balance is divided between program accounts.
| Use | Allocation or limit | Authority |
|---|---|---|
| Tax administration Collection, administration, and evaluation of administration. | Up to $50 million first-year start-up loan; actual necessary costs reimbursed in later years. | Director of Finance transfers the loan to the Franchise Tax Board. Repayment comes first. |
| Health-care account Coverage, safety-net providers, access, services, and provider payments. | 90% after administration; appropriation cap $22.5 billion per fiscal year. | Controller allocates and transfers; Legislature appropriates. |
| Education and food assistance K–14 education and food programs. No fixed internal split. | 10% after administration; appropriation cap $2.5 billion per year. | Controller allocates and transfers; Legislature appropriates. |
The Legislature can appropriate below the annual caps and hold money in reserve. Health uses are broad; the text does not promise a payment to every patient or require premiums to fall. Campaign committees have no statutory authority to allocate these tax proceeds.
The new constitutional section prohibits borrowing, lending, or transfers to other funds, but expressly preserves Government Code §§16310 and 16381 as they stood January 1, 2025. Those exceptions require separate historical-code verification before we can describe their full borrowing limits and controls. The Controller administers fund transfers; this assessment does not certify that no temporary diversion is possible.
Proposition 40 · Initiative 25-0024A1 · Constitution Article XIII §37(d)–(g); Government Code §16355(c) ↗The law bars using its appropriations to supplant existing state health, education, and food-assistance funding. Its two-thirds legislative amendment clause requires changes to remain consistent with and further the act’s purposes. Neither provision establishes unrestricted authority to spend the money on unrelated programs.
Proposition 40 · Initiative 25-0024A1 · Government Code §16355(d); Revenue & Taxation Code §50310 ↗Administration costs are an authorized use outside direct services. Department of Finance reports to the Legislature must cover balances, revenue estimates, proposed and past spending, reserves, and a certification against replacing other state funding. FTB must examine tax returns. These are reporting and tax-compliance requirements, not a guarantee of effective spending or a verified independent annual spending audit.
Proposition 40 · Initiative 25-0024A1 · Government Code §16355(e)–(f); Revenue & Taxation Code §50301(e) ↗No expenditure inconsistent with this proposed law has been established here. Future appropriations, transfers, recipients, and reports must be examined before calling a transaction misuse. Cross-referenced borrowing powers remain an explicit review item.
Ballot Lens interprets the funding and tax mechanisms below. Eligibility, revenue collected, appropriations, and behavioral responses determine actual effects.
Eligible services and providers could receive funding. Whether patients gain access, lower premiums, or lower out-of-pocket costs depends on appropriations and delivery; the tax alone does not guarantee those results.
K–14 education and food programs share one account. The measure does not specify a fixed split between those two uses.
Would owe tax on defined net wealth, with valuation, reporting, payment, and possible dispute costs. The rate phases in for individuals between $1 billion and $1.1 billion.
Temporary special-fund revenue could support services, while behavioral responses could reduce ongoing income-tax revenue. Those effects can occur together.
Owners’ asset sales, investment decisions, or relocation could affect businesses and jobs. This review does not establish how many jobs would be gained or lost.
The official guide lists Bernie Sanders and SEIU–United Healthcare Workers West as supporters; California Primary Care Association, California School Boards Association, and California Taxpayers Association as opponents. An endorsement and a disclosed contribution are different evidence.
Official supporter and opponent listing ↗Supporters argue the tax would replace lost federal funding, protect care and education, and distribute tax burdens more fairly. Their revenue prediction and promised service effects are campaign claims.
Submitted by Suzanne Jimenez (SEIU-UHW), Victoria Barron (Planned Parenthood of Pacific Southwest), and Denise Robb (AFT Local 1521).
Opponents argue the tax could drive investment away, reduce continuing revenue, weaken school protections, and create expansion and spending risks. Those predicted outcomes require evidence.
Submitted by René Bravo (California Medical Association), Francisco Silva (California Primary Care Association), and Debra Schade (California School Boards Association).
The official arguments appear below. They are the authors’ opinions; the state does not verify their accuracy. An individual signatory’s affiliation does not establish that their employer or parent organization endorses the same position.
Open the complete official arguments and rebuttals ↗| Campaign claim | What the evidence supports or leaves open |
|---|---|
| Support campaign: approximately $100 billion raised. | The LAO projects tens of billions with substantial uncertainty, rather than a guaranteed $100 billion. Campaign and official forecasts use different assumptions. |
| Opposition campaign: $25 billion lost revenue. | The campaign cites a study; its methodology has not been independently reviewed here. A cumulative or net forecast is not directly comparable to the LAO’s possible annual income-tax reduction. |
| Opposition campaign: legislators can expand the tax to anyone. | §50310 permits amendments by two-thirds in both houses only when consistent with and furthering the act’s purposes. Article XIII §37 authorizes a one-time billionaire tax. The scope of future amendments may be contested; expansion to every taxpayer is not automatic. |
| Opposition campaign: no accountability. | §16355(f) requires reports to the Legislature and a non-supplanting certification. Reporting exists; the reviewed text does not establish an independent annual audit of program spending. |
| Retirement accounts are either all taxed or all exempt. | §50303(c)(7) generally exempts qualified pensions and IRAs, but has exceptions, including aggregate Roth-type balances above $10 million for covered taxpayers. Blanket statements omit those distinctions. |
These checks describe the reviewed evidence and remaining uncertainty. They do not assign a truth score to every campaign assertion.
Both campaign websites are linked in the Secretary of State’s Quick Guide. The descriptions of appeals are Ballot Lens interpretations of persuasion techniques, not findings about the speakers’ motives.
Check the official campaign links ↗Contribution records through Oct 9, 2026 · 220 reconciled records. These are campaign contributions, separate from revenue the proposed tax might collect.
A recipient committee raises or receives funds for political activity and reports to the state. A committee name is a disclosed identifier, not proof of every named group’s endorsement or a complete membership list. Sponsorship claims below come from official names; campaign links are matched to paid-for disclosures where verified.
Reported registration: ACTIVE · treasurer / responsible officer: ELLI ABDOLI.
Purpose, official registration, donors, and transactions ↗Reported registration: ACTIVE · treasurer / responsible officer: GUSTAVO MEDINA.
Purpose, official registration, donors, and transactions ↗Reported registration: ACTIVE · treasurer / responsible officer: BRANDON PHILIPCZYK.
Purpose, official registration, donors, and transactions ↗Reported registration: ACTIVE · treasurer / responsible officer: THOMAS W. HILTACHK.
Purpose, official registration, donors, and transactions ↗Reported registration: ACTIVE · treasurer / responsible officer: ALAN S DAVIS.
Purpose, official registration, donors, and transactions ↗Reported registration: ACTIVE · treasurer / responsible officer: STEVEN S LUCAS.
Purpose, official registration, donors, and transactions ↗Contribution source date: Oct 9, 2026. Retrieved Oct 11, 2026. Official search total reconciled against all 220 returned contribution rows.
Committee names, status, and linked officers are matched to the official bulk tables. That confirms identity records; original financial filings and amendment histories have not been reconciled. Donor profiles without a disclosed ID are grouped by reported name, state, employer, and occupation; matching reported fields can combine different people, and changes in those fields can split one donor across profiles.
Contributions from allied committees are excluded by the source search. Independent spending, campaign expenditures, and transfer tracing are not imported yet. Missing spending is unavailable, rather than $0. A contribution is evidence of reported funding, not proof of motive or an endorsement. Contributions to multi-measure committees cannot be added across measures as unique dollars.
The LAO warns that Proposition 40 could be prevented from taking effect if Proposition 41 or 42 also passes with more yes votes and a court finds a conflict. That is a conditional legal interaction, not an automatic result from passage alone.
Proposition 40 is qualified for November 3, 2026. The Attorney General’s filing identifies Suzanne Jimenez as initiative proponent. Her November 24, 2025 submission is the first amendment to initiative 25-0024. Proponent, argument author, organizational supporter, and committee officer are distinct roles.
Initiative 25-0024A1 · proponent filing ↗Official qualified measure list ↗Human editorial review is pending. Historical borrowing-code verification, campaign-study methodology, original finance filings and amendments, expenditures, and indirect funding remain unresolved. This page does not predict court rulings, certify spending compliance, or recommend a vote.
Our evaluation method →