Taxing CA billionaires probably not a panacea, experts say

The idea of taxing the rich has gained steam among California progressives and health care advocates as the cost of living continues to rise and federal funding cuts are projected to render health care more inaccessible to the poor.

But while taxing the rich to cover missing federal health funding might be popular messaging, backfilling Medi-Cal spending could worsen the state’s structural budget deficit, writes CalMatters’ Yue Stella Yu.

Backfilling that spending would mean taking on spending previously covered by the feds, a potentially dicey proposition if you are already trying to plug a $22 billion budget hole. 

Progressives have backed at least three proposals this year to tax wealthy people and corporations:

• A bill that would close a tax loophole that currently allows multinational corporations to avoid paying taxes on their profits by establishing subsidiaries outside California’s borders.
• Another bill that would require businesses whose workers rely on Medi-Cal to contribute to a fund to make up for the lost health care coverage stemming from the Trump administration’s Medicare cuts.
• A proposed ballot initiative for a one-time tax on billionaires to offset federal funding cuts to health care.

The central aim of these measures resonates with progressives, who have made fighting income inequality a core tenet. But some experts say they would do little to help close the state’s multibillion-dollar long-term budget gap.

So what could work?

Stark argues that revisiting the state’s property tax — capped at 1% of the property value by Proposition 13 in 1978 — could be a sustainable possibility. But bids to change Prop. 13 are politically contentious, and as Phil Ting, the former head of the Assembly’s budget committee and San Francisco Democrat, put it: “It’s a very difficult time to introduce even further costs in taxes to middle-class Californians.”

Read more.

U.S. Rep. Eric Swalwell’s exit from the governor’s race could potentially lead to a surge of voters rallying around other top Democratic candidates. But what chain reaction does his resignation from the U.S. House trigger?

As CalMatters’ Jeanne Kuang explains, a day after ending his bid for governor following accusations of rape and sexual misconduct, Swalwell on Monday said he would also resign from Congress.

Gov. Gavin Newsom now has the option to call for a special election to replace Swalwell until his term ends in January 2027. Because the filing deadline to appear on the June primary ballot has passed, the date for the special election will also be at Newsom’s discretion.

If Newsom does call a special election, the earliest it could be held would be mid-August. The governor has yet to say whether he’ll call one, but if he doesn’t, Swalwell’s seat will stay empty until mid-January, narrowing what limited power the outnumbered House Democrats already have.

Read more.

Four years ago, California set aside $70 million to provide more books to children, and so far zero books have been distributed, reports CalMatters’ Adam Echelman. 

In 2022, lawmakers allocated money for the California State Library so it could partner with Dolly Parton’s Imagination Library and provide kids with books. The state library then created a separate nonprofit, the Strong Reader Partnership, which spent $1.1 million in state funding to pay a consultant, financial services companies and marketing firms. But as of 2025, the organization had not distributed a single book.

Then in 2024 — when the project first came under scrutiny because most of the program’s money sat idle for nearly two years — the Legislature passed a law rerouting 90% of the money earmarked in 2022 to go directly to the Teneessee-based Dollywood Foundation, instead of the Strong Reader Partnership or another California nonprofit.

At a Senate hearing last week, top officials from the Strong Reader Partnership argued that the program failed because lawmakers pulled funding prematurely. They also said the nonprofit fulfilled its duty of fundraising and securing participation from local organizations — not delivering books.

But Sen. Sasha Renée Pérez, who led last week’s hearing, remained skeptical. The Pasadena Democrat said the state plans to conduct an audit of the program.

Read more.

Last fall, CalMatters covered the saga of the well-to-do Silicon Valley suburb that set aside some land for denser development in compliance with state housing law, only to scale back its plans once a developer proposed a major apartment project for the site. Since then, regulators with California’s Housing Department signed off on the town’s about-face. 

Now, the California Housing Defense Fund, a pro-development legal advocacy group, is suing the town, arguing that its housing plan violates state law — even if the state’s own regulators don’t see things that way.