What You Need to Know: The CMA Board of Trustees has voted to oppose the proposed Billionaire Tax Act, warning that the ballot measure would increase budget volatility, lacks accountability and is not a sustainable solution to California’s health care funding challenges. Physicians remain committed to protecting Medi-Cal and pursuing long-term funding solutions like the proposal to permanently extend the voter-approved Prop 55 (2016) income tax on the state’s highest earners to fund health care and education.
The California Medical Association (CMA) Board of Trustees has voted to oppose the proposed Billionaire Tax Act, concluding that the ballot measure would create additional uncertainty for California’s health care system at a time when Medi-Cal already faces significant financial pressures.
As we face draconian Medicaid cuts at the federal level, it is more important than ever to work together to secure reliable funding for California’s health care safety net. CMA physicians strongly support protecting and strengthening Medi-Cal and ensuring patients have access to care. However, the association believes the initiative, which has turned in sufficient signatures to appear on ballots this November, is the wrong approach and could ultimately make the state’s health care funding challenges worse.
The proposed ballot measure would impose a one-time 5% tax on the accumulated wealth of California billionaires and, according to proponents, the resulting revenue would be directed toward health care programs, food assistance and public education.
Among CMA’s concerns:
- More Budget Instability, Not Less: California already relies heavily on a volatile revenue system tied to economic cycles and capital gains income. This initiative makes our health care system more dependent on an already unpredictable system. In fact, this measure may result in less funding for our general fund and therefore less funding for health care.
- Not a Long-Term Solution: Even supporters acknowledge the proposal is intended as a one-time response to a budget challenge. California’s health care system cannot be built on temporary revenue spikes or uncertain funding streams. Patients, providers, and health care programs need reliable, sustainable funding, not a short-term fiscal fix that could ultimately reduce overall state revenues and make future budget shortfalls more severe.
- Will Reduce Funding: During economic downturns, revenues decline sharply, creating significant budget challenges.
- No Health Care Input: Health care stakeholders were not involved in developing the proposal. If the goal of this initiative were genuinely to solve Medi-Cal funding challenges, California’s physicians, providers, hospitals, clinics, and other health care stakeholders would have been included in developing the proposal.
- Lacks Oversight and Accountability: This measure has no safeguards to ensure the revenue generated is directed toward patient care. There is no meaningful oversight or accountability structure to guarantee that promised funds reach Medi-Cal patients, providers, clinics, or communities in need.
- Voter Confusion: If this measure is on the ballot, it will make it more difficult to pass the extension of California’s existing tax on high income earners that has become critical funding to balance the state budget.
- Supporters are Undermining Healthcare System: The organization backing this proposal is advancing other ballot measures that will push physicians and health care providers out of state and that would close clinics and reduce access to care for patients across California.
- Alternate Revenue Sources: CMA is committed to identify long-term, reliable funding solutions for Medi-Cal and the broader health care system. If this one-time tax measure qualifies for the ballot, it could make it more difficult to pass a separate proposal to extend California’s existing tax on high-income earners (Prop 55, passed in 2016), which has become a critical source of state funding for education and health care programs.
California faces an estimated loss of $30 billion a year in federal funding in Medi-Cal due to H.R. 1 alone and could see 3.4 million Californians losing coverage over the next decade. The Billionaire Act Tax measure would exacerbate the challenges and create additional challenges for Medi-Cal funding.
California physicians support protecting Medi-Cal and expanding access to care and strongly support exploring additional revenue options and sustainable funding strategies to achieve this goal.
But this initiative is the wrong approach. It lacks accountability, fails to provide a sustainable funding solution, and risks making California’s budget challenges worse. Protecting patient care requires long-term, reliable funding and responsible policymaking, not a ballot measure that creates more uncertainty for the very programs it claims to support.