The Democratic Party in California has endorsed a billionaire tax despite opposition from Governor Gavin Newsom.
If the measure, Proposition 40, is approved, it would result in a 5 per cent one-time levy on around 200 billionaires living in the state.
It aims to raise $100bn (£75bn) over five years to fund Medicaid and food assistance programmes.
The party backed a November ballot on the measure after clearing the 60 per cent threshold needed at a vote on Sunday.
Mr Newsom, a Democrat seen as a future presidential candidate, is opposed to the levy which he argues will drive the wealthy out of the state.
Governor Gavin Newsom believes the levy will drive billionaires out of California – Tayfun Coskun/Anadolu
Xavier Becerra, his probable successor as governor, also opposed the measure, along with unions such as the California Teachers Association and California Professional Firefighters.
The tax would retroactively apply to those who resided in California as of Jan 1, 2026, and who have a net worth of $1bn (£750m) or more by the end of this year.
For the purposes of the tax, a person’s net worth excludes assets such as real estate they own directly.
Californians will decide whether to approve or reject the initiative in the November ballot.
Members of the California Democratic Party’s 380-member executive board gathered in San Diego over the weekend to consider the proposal. They narrowly voted to back the measure after earlier votes to endorse it had failed.
The tax was proposed by the Service Employees International Union United Healthcare Workers West (SEIU-UHW), a large healthcare union.
“This endorsement puts to rest the idea that California Democrats are not united by the billionaire tax – they are,” said Dave Regan, president of the union.
“Polling shows that more than 80 per cent of registered Democrats support this critical solution to our healthcare crisis and now the Democratic Party of California has officially embraced that strong support through this endorsement,” he added.
According to a May poll from the Public Policy Institute of California, 54 per cent of voters and 76 per cent of Democrats said they would vote for the tax.
Backers include Senator Bernie Sanders and Representative Ro Khanna, who argue the wealthiest Californians should be paying\ more to fund healthcare.
After the tax qualified for the ballot in June, Mr Newsom attempted to persuade the SEIU-UHW to withdraw it.
The union initially offered to withdraw the proposal if the governor agreed to back a smaller wealth tax.
Mr Newsom, widely expected to run in the 2028 presidential election, has raised more than $1.7m (£1.3m) for critical state parties, more than any other Democrat or White House rival.
He also raised the most for the Democratic Party in South Carolina, which is expected to host the first contest in the 2028 primary.
Jay Parmley, executive director of the state party, confirmed the governor had raised more than $300,000 (£225,000) for the state party from grassroots fundraising. This fundraising ability will be critical in a presidential run.