A proposed tax on the wealth of billionaires in California has qualified to appear on the November ballot after state officials confirmed that its backers collected sufficient signatures, marking a significant development in the state’s ongoing debate over income inequality and taxation.

The initiative, backed primarily by the Service Employees International Union-United Healthcare Workers West, would impose a one-time 5 percent tax on assets held by residents with a net worth of at least $11 billion. Those with wealth between $1 billion and $1.1 billion would face a smaller tax rate. The bulk of the proceeds are earmarked for healthcare funding. Supporters argue the tax is needed to offset reductions in Medicaid and federal health programs resulting from legislative changes enacted last year.

California’s secretary of state office verified the petition drive had surpassed the threshold of approximately 875,000 valid signatures, allowing proponents to submit the measure for ballot consideration. However, proponents have until June 25 to decide whether to move forward with formally placing the initiative on the ballot.

Governor Gavin Newsom has voiced strong opposition to the plan, calling it harmful to the state’s economic climate. Newsom, a Democrat, has criticized the measure for contributing to the relocation of billionaires and their tax contributions out of California. He has suggested that such a wealth tax should be implemented at the federal level rather than by an individual state and expressed confidence that the proposal would be defeated at the polls.

The proposed tax has drawn resistance not only from billionaire individuals and business leaders—who warn that liquidating assets to pay the levy could destabilize companies, particularly in the technology sector—but also from unexpected quarters, including the California Teachers Association and the California Medical Association. Both groups have raised concerns about the initiative’s focus on channeling funds primarily into healthcare instead of education or other social services.

An analysis conducted by the California Legislative Analyst’s Office projects that the wealth tax could generate tens of billions of dollars in additional revenue over several years. The report also notes, however, that income tax revenues may decline by hundreds of millions of dollars annually due to potential migration of wealthy residents out of the state.

While some Democrats support taxing billionaire wealth in principle, they have criticized this specific measure’s design and allocation priorities. The expected ballot fight promises to be costly and politically contentious, pitting proponents’ calls for increased wealth redistribution against opponents’ warnings about economic repercussions and the viability of California’s tech-driven economy.