California’s Billionaire Tax Trails in Early Returns as Housing Bond Pulls Ahead

A proposed one-time tax on California’s billionaires was trailing in early results on Wednesday, while a large housing bond measure was on track to pass, according to CalMatters, KQED and Associated Press tallies.

The billionaire tax

Proposition 40 was receiving about 44 percent support, with about 56 percent opposed, in early returns. Millions of mail ballots remained to be counted, and California results often shift in the days after an election as later ballots are tallied.

The measure would impose a one-time tax on the net worth of the state’s wealthiest residents. Supporters, including labor unions and health care advocates, said the money would help fill budget gaps in public health programs after federal funding cuts.

Opponents, including technology investors and business groups, warned that the tax would push wealthy residents and their companies out of the state. Some prominent billionaires had publicly said they were weighing moves before the vote.

Gov. Gavin Newsom opposed the measure, arguing it would harm the state’s economy and could prove difficult to administer, according to CalMatters.

The housing bond

Proposition 37, a $25 billion bond to help first-time homebuyers and fund affordable housing, was passing with about 61 percent support, according to early returns reported by KQED.

Bonds require voter approval in California and are repaid from the state’s general fund over decades. Supporters said the measure would help address the state’s chronic housing shortage. Critics questioned adding long-term debt at a time of budget pressure.

Why counting takes time

Nearly every California voter receives a mail ballot. Ballots postmarked by Election Day count if they arrive within seven days, and each signature must be checked against voter records. Counties have until early December to certify results.

Early returns in California often include ballots returned well before Election Day. Ballots cast later, including those dropped off on Election Day, can lean in different directions.

What it means

If Proposition 40 fails, it would be the latest in a series of rejected efforts to raise taxes on high earners in California through the ballot. The result is likely to be studied by advocates in other states considering wealth taxes.

Sources: Associated Press, KQED, CalMatters.