Taxing California’s billionaires likely isn’t a panacea, experts say

The idea of ​​taxing the wealthy has gained momentum among California progressives and health care advocates as the cost of living continues to rise and federal funding cuts are expected to make health care more unaffordable for the poor.

But while taxing the wealthy to cover missing federal health care funding may be a popular message, filling Medi-Cal costs it can get worse the state’s structural budget deficit, writes CalMatters’ Yue Stella Yu.

Filling those costs would mean taking on costs that were previously covered by the feds, a potentially dangerous proposition if you’re already trying to plug a $22 billion budget hole.

Progressives have supported at least three proposals this year to tax the wealthy and corporations:

• Account it would close a tax loophole that currently allows multinational corporations to avoid paying taxes on their profits by setting up subsidiaries outside California’s borders.
• Another account it would require businesses whose workers rely on Medi-Cal to pay into a fund to make up for lost health coverage resulting from the Trump administration’s Medicare cuts.
• Proposed ballot initiative for a one-time tax on billionaires to offset cuts in federal health care funding.

The central goal of these measures resonates with progressives, who have made fighting income inequality a core principle. But some experts say they would do little to help close the state’s multibillion-dollar long-term budget hole.

So what might work?

Stark argued that overhauling the state property tax — capped at 1 percent of property value since Proposition 13 in 1978 — could be a viable option. But the proposals to change Proposition 13 are politically contentious, and as Phil Ting, former head of the Assembly Budget Committee and a San Francisco Democrat, said, “It’s a very difficult time to put even more tax costs on middle-class Californians.”

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U.S. Rep. Eric Swwell’s withdrawal from the gubernatorial race could potentially lead to a wave of voters rallying around other leading Democratic candidates. But what a chain reaction causes his resignation from the US House of Representatives?

As Jeanne Kuang of CalMatters explains a day later ends his run for governor after allegations of rape and sexual misconduct, swwell on monday said he would also resign from congress.

Gov. Gavin Newsom now has the option of calling a special election to replace Swawell until his term expires in January 2027. Since the June primary ballot filing deadline has passed, the date for the special election will also be at Newsom’s discretion.

If Newsom calls a special election, the earliest it could be held is mid-August. The governor has not yet said whether he will call for one, but if he doesn’t, Swawell’s seat will remain vacant until mid-January, narrowing the limited power already held by outnumbered House Democrats.

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Four years ago, California set aside $70 million to provide more books to children, and so far zero books were given outAdam Echelman of CalMatters reports.

In 2022, lawmakers appropriated money for the California State Library to partner with Dolly Parton’s Imagination Library and provide children with books. The state library then created a separate nonprofit, the Strong Reader Partnership, which spent $1.1 million in state funding to pay a consultant, financial services companies and marketing firms. But as of 2025, the organization has not distributed a single book.

Then in 2024 — when the project first came under scrutiny because most of the program’s money went unused for nearly two years — the Legislature passed a law redirecting 90 percent of the money earmarked in 2022 to go directly to the Tennessee-based Dollywood Foundation, instead of the Strong Reader Partnership or another California nonprofit.

At a Senate hearing last week, senior officials from the Strong Reader Partnership argued that the program failed because lawmakers cut off funding prematurely. They also said the nonprofit fulfilled its obligation to raise funds and secure participation from local organizations — it did not deliver books.

But Sen. Sasha Rene Perezwho presided over last week’s hearing, remained skeptical. The Pasadena Democrat said the state plans to audit the program.

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Last fall, CalMatters covered the saga of an affluent Silicon Valley suburb that set aside some land for denser development under state housing law, only to scale back your plans once a developer proposed a master apartment project for the site. Since then, regulators with the California Department of Housing written off across the face of the city.

Now the California Housing Defense Fund, a pro-development legal advocacy group, is suing the city, arguing that its housing plan violates state law — even if the state’s own regulators don’t see it that way.