California voters have rejected Proposition 40, a first-in-the-nation ballot measure that would have imposed a one-time 5% tax on the net worth of residents worth more than $1 billion, the Associated Press determined on Monday. With about 83% of the expected vote counted, the measure trailed 52.8% to 47.2% - 5,909,778 votes against and 5,288,379 in favor.

Proposed by the healthcare workers' union SEIU United Healthcare Workers West, the tax would have applied to the roughly 200 Californians who were billionaires on January 1, 2026. Backers said it would raise about $100 billion over five years to backfill federal funding cuts to healthcare, with 10% of the money going to education and food-assistance programs.

Opponents outspent supporters by more than 10-to-1. The "no" campaign raised roughly $378 million, including more than $333 million for the political action committee Building a Better California and more than $100 million from Google co-founder Sergey Brin alone. The "yes" campaign raised about $33.5 million, and SEIU-UHW spent more than $30 million.

The result is a significant win for Gov. Gavin Newsom and other Democratic leaders who opposed the measure, arguing a state-level wealth tax could damage California's economy and drive wealthy residents to leave. Critics of the tax said it would have prompted ultrawealthy taxpayers to relocate, and fellow Google co-founder Larry Page was among billionaires reported to be distancing themselves from the state ahead of the vote.

The defeat is a stinging setback for supporters who had hoped to create a template for taxing wealth that could extend far beyond California. SEIU-UHW president Dave Regan vowed to put a billionaire tax back on the ballot in 2028 if lawmakers in Sacramento do not come up with a solution to the healthcare cuts by then.

A companion measure, Proposition 42, which would bar any new wealth tax in California, was leading 51.6% to 48.3% late Monday but had not yet been called. A separate measure aimed at adding new spending rules and audit requirements failed, according to the AP. The California secretary of state certifies the final result on December 11.

The AP Voter Poll found the measure split sharply by age and income: most voters under 30 backed it, while roughly seven in 10 voters aged 65 and older opposed it. About half of voters with household incomes under $100,000 supported the tax, while nearly six in 10 earning $100,000 or more opposed it.