With midterm elections coming up, voters Are exposed to exorbitant amounts of advertisements
and endorsements, especially in regards to Proposition 40, known as the “Billionaire Tax.”
If Proposition 40 passes on Nov. 3, California will administer a one-time 5 percent tax on California’s 250 billionaires who claim residency in the state.
Assuming low avoidance from paying taxes, the tax would generate about $100 billion over the course of five years and be utilized for state healthcare, schools and food assistance programs. Google co-founder Sergey Brin is one billionaire who has already moved residences and business assets out of California to avoid the prospective tax.
“We could once again find ourselves pioneering redistributive policies, and helping solve the massive wealth inequality here in the United States,” said Alexander Torres, a fourth-year politics and Latin American and Latino studies double major and president of the UC Santa Cruz College Democrats.
Proposition 40 was brought to the ballot by Service Employees International Union-United Healthcare Workers West (SEIU-UHW), a healthcare labor union with chapters across the state. There are about 120,000 union members in California alone.
The objective of Proposition 40 is to supplement the federal funding cuts in healthcare and education instated by the Trump administration, specifically the cuts made to Medicaid in the One Big Beautiful Bill Act (OBBBA). The collected revenue would be put into two different special funds: 90 percent is reserved for healthcare programs and the other 10 percent is for public schools and food assistance, such as CalFresh.
There are many notable figures and organizations who have adopted a stance on Proposition 40. American Federation of State County and Municipal Employees (AFSCME) California, Vermont Senator Bernie Sanders and the California Democratic Party are a few notable proponents. Other groups have expressed their dissent, including the California Teachers Association, California Professional Firefighters and the Planned Parenthood Affiliates of
California (PPAC). Local political figures have also weighed in on the proposition.
“I’m going to vote for [Proposition 40], the wealthy need to pay more,” said Ryan Coonerty, a Santa Cruz mayoral candidate.
However, he also acknowledged arguments against Proposition 40.
“Teacher’s unions are worried about overall loss of revenue, I take their concerns seriously. The last thing we need is even more revenue loss,” Coonerty said. “I would prefer if it was a federal tax, so people couldn’t avoid it by moving away.”
What Does Proposition 40 Mean for the Average Santa Cruz Resident?
OBBBA, or H.R. 1, was signed into law by President Donald Trump on July 4, 2025, and directly slashed funding for Medicaid, which is a state and federal program that provides free or low-cost healthcare coverage to those who qualify. Medi-Cal, California’s Medicaid program, does the same.
Medi-Cal is not alone in suffering from funding cuts. H.R.1 cut more than $3 billion in annual federal funding to California’s public hospitals and, locally, more than $25 million annually from Santa Cruz county programs.
Just south of Santa Cruz, the Watsonville Community Hospital has experienced instability directly connected to the budget cuts imposed by H.R. 1. Currently, the hospital is operating at a $31 million annual deficit.
“While the funding allocations [of the bill] may be vague, its intent to continue funding our healthcare allows for hospitals like Watsonville Hospital to continue operating,” Alexander Torres said.
For Santa Cruz County, potential effects of funding cuts go beyond hospitals. As of May 2025, around 80,000 residents or 30% of the population are enrolled in Medi-Cal. Passing Proposition 40 would allocate funding from tax collection to Medi-Cal programs.
Ami Chen Mills, a Santa Cruz mayoral candidate and faculty lecturer at UCSC, believes there is a profound risk to Santa Cruz residents.
“There are a lot of people in [Santa Cruz] who rely on Medicaid and Medi-Cal. Hospital systems rely on this funding in Santa Cruz County. A funding cut could put even more people out on the streets. We don’t want that. Santa Cruz needs to stand for the people,” Mills said.
Jodi Hicks (CEO of PPAC) Against Proposition 40
Amidst advertisements against Proposition 40, Planned Parenthood has been seen at the forefront on multiple social media platforms.
Jodi Hicks, the CEO of PPAC, has taken a firm stance against the wealth tax, siding with the likes of Building a Better California, a nonprofit organization funded by Sergey Brin and former Google CEO Eric Schmidt. Both men are billionaires.
“I think it’s disappointing for the head of an organization that supports inclusive healthcare for all, specifically reproductive health, to be against a bill that would ultimately support the healthcare systems across [a] nation that [is] already suffering from severe budget cuts,” said Fatima Mariano, a UCSC student who works as an optometric technician.
Hicks has not received support from the community of PPAC. SEIU-UHW sponsored Planned Parenthood caregivers in calling for voters to “Support Proposition 40, not Jodi Hicks” and creating their website, as well as an ad promoting Proposition 40, while opposing Proposition 41 and Proposition 42.
Proposition 41 would require new tax proposals to abide by the state’s annual spending limit. Proposition 42 would prohibit taxes on personal property, such as investments and businesses. Proposition 40 isn’t written to follow the state spending limit and aims to tax accumulated wealth, including personal property. Thus, Proposition 40 will be nullified unless it gets more votes than Proposition 41 and Proposition 42.
According to the open letter from Planned Parenthood workers to Jodi Hicks, Trump’s “Big Beautiful Bill” has cut approximately $300 million from PPAC.
PPAC isn’t the only healthcare organization feeling the impacts of Trump’s funding cuts.
“[In the office], patients have expressed concerns about their insurance coverage and healthcare allowances changing due to Trump’s bill,” Mariano said. “With the budget cuts with Trump’s Big Beautiful Bill, there are so many local hospitals and clinics that got the rug pulled from under them. Current funding is just not enough to support these patients and with Proposition 40, this can definitely offset the lack of funding these systems are suffering from.”
UCSC and Proposition 40
“Here in Santa Cruz, so many students rely on CalFresh just to get by,” Torres continued.
Under H.R.1, CalFresh will see reduced budgets and eliminate the SNAP-Ed program, which promotes nutrition education for low-income individuals.
Gladis Beccerra Andres, a fourth-year legal studies student, believes that no one should be excluded from being taxed, especially those with extremely high incomes.
“[Taxation] is always going to be part of serving the people so excluding an elite group of people from contributing to the state and its nation is unjust. The rich can ask for any and all benefits from the government without contributing back because they’re rich. [It’s] a circular argument that makes no logical sense,” she said. “Eat the rich.”
Similarly, Ami Chen Mills argued that the issue goes beyond individual programs and into the larger question of who holds power in Santa Cruz.
“The billionaires have too much power, honestly there should be no billionaires,” Mills said. “Billionaires are buying our democracy, they’re buying it in Santa Cruz.”