A handful of powerful statewide unions broke with the larger labor movement to oppose a proposed tax on California billionaires. Now, their own locals are rebelling in support of the measure.
Proposition 40 divided labor groups from the start, a rift opponents seized upon as a sign that the measure’s organizers could not line up support on the left. But Prop. 40 supporters argue the latest divisions tell a different story: union locals and rank-and-file members are at odds with their Sacramento leaders, who have joined establishment Democrats like Gov. Gavin Newsom and tech billionaires in opposing the measure.
Teachers’ unions in San Francisco and Los Angeles recently defied statewide leaders of the California Teachers Association to endorse the billionaire tax. The CTA, one of the most formidable unions in Sacramento, had bucked much of organized labor by siding with Newsom and others opposing the billionaire-tax measure.
Adding to the teacher revolt in two of the state’s largest cities, several local affiliates of the State Building & Construction Trades Council have also broken with their statewide leadership to back the tax.
“As more and more union members found out about Prop. 40 … it galvanized support,” said Lorena Gonzalez, head of the California Labor Federation, the state’s largest umbrella group of unions, which has endorsed Prop. 40. “The labor movement should always be a ground-up movement — and that just shows in what’s happened recently.”
The CTA and the Building Trades oppose Prop. 40 alongside unions representing firefighters and domestic workers. They argue the tax would drive billionaires like Google co-founder Sergey Brin out of state and, in turn, harm California’s budget, a case that hasn’t held sway with many in organized labor.
But unions opposing Prop. 40 say a few defections are to be expected and don’t signal widespread dissent.
“The majority of our members are not revolting on this; the majority of our members are no on 40,” said Chris Hannan, president of the California Building Trades. “For a few [local unions] to see it differently — those things happen.”
Beyond the local unions, Prop. 40 has drawn a late wave of support from the broader labor movement. In recent months, the statewide Labor Federation, California Federation of Teachers (a separate educator union that had been neutral), National Union of Healthcare Workers, and California Nurses Association have all endorsed the measure.
Prop. 40 would impose a one-time, 5% tax on the assets of California billionaires, including the large share of their wealth held in stock and other investments. SEIU-United Healthcare Workers West, which proposed the measure, projects it would raise roughly $100 billion over five years, most of which would offset the Trump administration’s cuts to healthcare programs, including the fiscal cliff facing Medi-Cal, the health insurance program for millions of low-income Californians.
A recent study (opens in new tab) by economists at Stanford University’s Hoover Institution, a conservative think tank, estimated Prop. 40 would collect only about $30 billion, while costing California $39 billion in lost income tax revenue over time due to billionaire flight from the state.
Polling suggests voters are closely split over the measure, and support from rank-and-file union members could be crucial in the final week before Election Day on Nov. 3. A recent Citrin-POLITICO poll found (opens in new tab) Prop. 40 has a slight lead among likely voters, with 46% in favor and 43% opposed.
SEIU-UHW and its leader, Dave Regan, a firebrand who has often clashed with other labor leaders, have drawn criticism from other unions for crafting the tax without input from the rest of the labor movement. Critics also object that only a small share of its revenue would go to schools.
Still, Prop. 40 has seen growing support from local unions that argue the tax, although imperfect, is better than inaction. The split from local unions representing teachers in San Francisco and L.A. is perhaps the most stinging rebuke. United Teachers Los Angeles is the second largest union of its kind in the country (behind New York City), and represents about 35,000 teachers and staff.
Alex Schmaus, political organizer for the United Educators of San Francisco, which represents about 6,500 teachers and staff, said his local considers the CTA’s stance against the billionaire tax “an error.” He said the local union’s leadership endorsed Prop. 40 unanimously, without any opposition statements.
“We’ve got to find a way to take on these billionaires,” Schmaus said. “I don’t think you can have democracy and solidarity in a world run by billionaires.”
A spokesperson for the CTA didn’t directly respond to questions about the split with local unions. The CTA, in a statement in June, said its state council “determined that this policy will not provide the sustainable and long-lasting funding that our schools and communities deserve.” The CTA also has its own priority on the November ballot: Prop. 3 (opens in new tab), a permanent extension of California’s existing tax on top-income earners, a major source of school funding.
Leaders of the statewide teachers’ union say they fear Prop. 40 could complicate the question for voters if they get confused or frustrated by having too many tax measures on the same crowded ballot. Schmaus, however, said San Francisco teachers expect voters frustrated by growing wealth inequality will support both Props. 40 and 3.
The split among California’s Building Trades has also been a source of division within the labor movement. While the statewide union opposes the billionaire tax, rebelling locals include the San Diego Building Trades Council, which represents over 35,000 construction workers, and Sheet Metal Workers’ Local 104, which represents about 10,000 members in the Bay Area and Northern California.
Vince Sugrue, state legislative director for the Sheet Metal Workers’ local union, said support for the tax was “very overwhelming” among his membership. He added, “the healthcare conversation was too big of a deal for us to not weigh in.”
Hannan, of the California Building Trades, said the union worries that Prop. 40 will, in the long run, undercut state tax revenues that fund building projects, including infrastructure and school construction that provides countless jobs. He added, “Our members are working on these jobs all across the state.”
But growing support for Prop. 40 within the labor movement has been noticeable in recent weeks. On top of local unions making endorsements that defy their top brass in Sacramento, there has been a rush of more informal support for the billionaire tax.
For example, many of the Building Trades’ local union leaders supported Prop. 40 when they voted on the California Labor Federation’s endorsement at its convention in August. And while the San Francisco Building and Construction Trades Council hasn’t taken a stance, its local leader, Rudy Gonzalez, is an outspoken supporter of the tax.
Prop. 40 supporters have been quick to point out the split, arguing that the Sacramento leaders of the CTA and the Building Trades are out of touch with their members.
“A few staff people have lent their organizations’ logos to the billionaires,” said Suzanne Jimenez, chief of staff at the SEIU-UHW, Prop. 40’s lead sponsor. “It is deeply disappointing that [they] would put their organizations’ names and credibility at the service of billionaires.”