California billionaire tax vote draws record campaign spending

California voters will decide on 3 November whether to impose a one-time 5% tax on billionaires’ net worth under Proposition 40. Ahead of the vote, POLITICO reports that more than 70 current and former California billionaires have contributed a record $612 million to this year’s state elections, nearly half of it to groups working to defeat the tax.

The $612 million covers state elections broadly, not just the tax campaign. POLITICO found that at least 30 California billionaires gave more than $293 million to oppose Proposition 40. Its analysis drew on state contribution records and counted donations through 26 October.

What Proposition 40 would tax

Ninety percent of the proceeds would have to fund public health care services; the rest would go to education, food assistance and administration, The Rio Times reports. It cites the state Legislative Analyst’s Office as estimating collections of tens of billions of dollars over several years, alongside a likely long-term reduction in other state revenues of less than $1 billion a year.

Who is funding the campaign

POLITICO identifies Sergey Brin as the opposition’s largest benefactor and describes the Brin-led Building a Better California as the main vehicle for billionaire money against the measure. Frank Slootman, the Snowflake board chair and former chief executive, told POLITICO he gave $5 million to an opposition group. He argued that the proposal threatened private-property rights and California’s economic dynamism.

Building a Better California told POLITICO that the tax would damage the state’s tax base and budget, including the health care funding it aims to provide. On the other side, POLITICO says supporter Tom Steyer accounted for much of the remaining billionaire spending in its analysis, largely through his own gubernatorial campaign. For comparison, its analysis put billionaire spending on California state races and measures at $147 million in 2010.

Why the vote could be complicated

A September Public Policy Institute of California poll found 52% of likely voters supported Proposition 40 and 46% opposed it, according to The Rio Times. But rival Propositions 41 and 42 could block the tax if either receives more yes votes than Proposition 40, even if the tax itself wins a majority. Voters can support more than one measure, so the relative totals matter.

The vote has yet to take place. The Rio Times says it remains unclear how courts would treat a net-worth tax or how many wealthy residents might leave California in response.