Billionaire Tax Backers Dare Gavin Newsom to Embrace Scaled-Back Plan

Gov. Gavin Newsom promised to block a controversial billionaire tax from making it to the November ballot, but sources tell The Post that pessimism is growing around his team’s negotiations with one of California’s most powerful labor unions — and the measure’s backers complicated matters further Thursday by offering a startling challenge to the governor.

In an open letter, the Billionaire Tax Now Coalition — sponsored by labor union Service Employees International Union-United Healthcare Workers West — offered to reduce the proposed tax from 5% to 2% if Newsom agrees to support legislation it as a temporary solution to offset looming federal healthcare cuts.

“Governor Newsom, you have taken bold action when California needed it in the past,” the letter states.

“This is one of those moments. The ask is clear. The timeline is tight but achievable. And the payoff — preventing widespread hospital and community clinic closures and saving patient lives — is real and immediate.”

Helping with the high-stakes negotiations for the governor are Newsom’s chief of staff, Nathan Barankin, and veteran Sacramento attorney Ann Patterson, Barankin’s wife and a trusted adviser who has played a key role in sensitive political deals during the Newso administration. 

Looming over the talks, however, is SEIU-United Healthcare Workers West President Dave Regan, the powerful labor leader whose organization bankrolled the initiative and who sources described as the unpredictable “wild card” capable of sinking a compromise.

The proposal officially qualified for November’s election this week after state election officials verified enough petition signatures, but organizers have up until a June 25 deadline to pull it from the ballot.

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As written, the initiative would impose a one-time 5% tax on California residents whose net worth exceeded $1 billion as of Jan. 1, 2026. The measure would affect roughly 200 people and generate an estimated $100 billion, with 90% dedicated to healthcare spending and the remainder earmarked for education and food assistance programs.

SEIU-UHW, which has spent more than $31 million backing the measure, argues California needs the revenue to offset deep federal healthcare cuts enacted last year through President Trump’s tax and spending package known as the “One Big Beautiful Bill Act.”

In Thursday’s letter, the coalition said a reduced 2% levy would serve as a two-year bridge while state leaders develop a longer-term funding strategy. The group argued the tax could prevent 150,000 healthcare job losses, avert hospital and clinic closures and preserve coverage for 3.2 million Californians. It also warned that more than 20 million residents could face higher premiums, deductibles and copays if lawmakers fail to act.

“When hospitals are closed and costs are shifted to working families, patients die,” the coalition wrote. “These aren’t abstractions; they’re preventable deaths.”

Newsom’s office did not respond to The Post’s reqiuest for comment on the letter, but the governor has consistently opposed a state wealth tax increases during his tenure.

Sources familiar with the talks tell The Post that the coalition Newsom assembled has become so sprawling that negotiations increasingly resemble “an international treaty with nine different parties,” with hospital groups, business interests, labor organizations and lawmakers all seeking concessions tied to separate priorities.

Regan, a veteran political brawler in Sacramento, is also “widely known around town as an irrational actor,” one source said.

Google co-founder Sergey Brin has contributed $82 million to Building a Better California, a committee backing separate initiatives that could weaken or invalidate the wealth tax if both measures pass, according to campaign finance records.

Other wealthy opponents include former Google CEO Eric Schmidt, venture capitalist John Doerr, investor Ron Conway and Ripple Labs co-founder Chris Larsen.

Opponents warn the measure could accelerate the departure of high-net-worth residents from California, citing reports that Brin relocated to Nevada and that Meta CEO Mark Zuckerberg has shifted his primary residence out of state. California reportedly lost a trillion dollars worth of wealth earlier this year.

If no agreement emerges, Newsom could find himself entering a potential presidential campaign while defending a first-in-the-nation wealth tax battle that would put California’s economic model at the center of the national political debate.

“Newsom does not want to be seen as the governor who oversaw California taxing wealth,” one person familiar with the negotiations said. “It’s not going to help his larger ambitions.”