Marchands Against Political Apathy 2026

Welcome to Marchands Against Political Apathy (MAPA), our guide to the 14 propositions on the November 2026 California ballot. This interesting mix of initiatives reflects the zeitgeist, which MAPA defines this year as concern with the cost of living in California (including housing), income inequality, and election integrity. The Legislature, well-heeled organizations, and wealthy individuals are capitalizing on voter sentiment to place propositions on the ballot they hope will appeal to voters, including a tax on billionaires, a permanent extension of high-income tax brackets, a change to the recall process, and the largest affordable housing bond in California’s history.

Of these 14 measures, two are constitutional amendments placed on the ballot by the Legislature, one is a general obligation bond placed on the ballot by the Legislature, one is a statute placed on the ballot by the Legislature, and the remaining ten are signature-qualified initiatives. In contrast, there were six signature-qualified initiatives out of seven propositions in 2022 and eight out of 12 in 2020. So, if you feel overwhelmed by this ballot, we feel you. Sadly, we cannot say there are any true “citizens’ initiatives” on the ballot even though they qualified through the signature gathering process. Perhaps we should all gather signatures to reform the proposition process? This was a very complicated set of measures that any expert would struggle to understand, much less the average voter.

We start with a “cheat sheet,” which provides only ballot numbers and recommendations. To help defeat apathy, we encourage you to read the entire MAPA guide that follows the cheat sheet. (Hey, it’s shorter than reading your full Official Voter Information Guide.) Below each proposition in the MAPA guide, we provide the official title and summary prepared by the Attorney General for easy reference, followed by our “analysis.” Our analysis is informed by reading about the measures, reviewing the proposed language, a little bit of “insider” knowledge from our work in government, and talking with trusted experts, friends and colleagues. As always, we do not claim expertise on many (or even most) of the measures on this year’s ballot; you might know more about a subject than we do. Honestly, we felt a little out of our league analyzing some of these complicated measures but we hope this work helps you with your research. This is an effort to encourage voting, rather than getting people to agree with us. Good luck, and don’t forget to vote on Tuesday, November 3rd!

Cheat Sheet

• Proposition 1 Authorizes bonds for housing affordability programs: YES

• Proposition 2 Increases State’s Rainy Day Fund: YES

• Proposition 3 Provides permanent funding for schools and health care by extending existing tax on high incomes: YES

• Proposition 4 Repeals prohibition against public funding of election campaigns: YES

• Proposition 5 Changes recall election process for statewide officers: YES

• Proposition 37 Creates loan program for middle-income buyers of qualified new homes: NO

• Proposition 38 Authorizes bond for immunology medical research: NO

• Proposition 39 Prohibits citizens from voting unless they present government-issued identification: NO

• Proposition 40 Imposes one-time tax on certain taxpayers: NO

• Proposition 41 Prohibits new state taxes that exclude revenues from state spending limit: NO

• Proposition 42 Prohibits new state personal property taxes and certain retroactive state taxes: NO

• Proposition 43 Limits voters’ ability to raise revenues for local government services: YES

• Proposition 44 Requires community health clinics to spend 90% of revenue on program services: NO

• Proposition 45 Modifies environmental review for certain projects: NO

Proposition 1: Authorizes Bonds for Housing Affordability Programs

Marchand Recommendation: YES

Who put it on the ballot: The Legislature

Summary

• Authorizes $11.25 billion in state general obligation bonds for housing affordability programs, including for California veterans, to finance housing development projects seeking federal tax credits.

• Allocates funds:

  • $5.1 billion to build and rehabilitate multifamily rental housing

  • $2.1 billion to acquire, rehabilitate, or preserve affordable housing units, and provide supportive housing for those experiencing homelessness;

  • $1.25 billion for state-funded mortgages for California veterans

  • $1.1 billion for homeownership and downpayment assistance

  • $1 billion for farmworker, tribal, and student housing

  • $500 million for housing infrastructure

  • $200 million to support local housing programs

Our Analysis

The Legislature placed this bond on the ballot to continue state efforts to address California’s well-documented shortage of affordable housing, meaning homes that lower-income households can rent or buy without spending more than 30% of their income on housing. It also aims to address homelessness, which affects people without a stable place to live, many of whom also struggle with mental illness or substance use. According to the Assembly Committee on Housing and Community Development, California needs 180,000 new units of housing per year to keep up with demand – including about 80,000 units per year affordable to lower-income households. The Committee further states that past production has been under 100,000 units per year – including less than 20,000 units of affordable housing per year.

Proposed solutions to the affordable housing shortage generally fall into two camps: (1) reduce the cost of building housing in California, including by streamlining environmental review, permitting, and local approvals; and (2) provide public subsidies to affordable housing developers to make projects financially feasible. As is often the case in policy, the best solution is likely a combination of the two. Proposition 1 primarily addresses the second camp, providing additional public funding for affordable housing, although it also includes $200 million for local pilot programs aimed at lowering construction costs. As a voter, you will need to decide whether the State is doing enough to reduce costs to justify additional investment in affordable housing, or whether it should do more on reducing costs first.

Proposition 1 has a long list of supporters who are funding the “yes” campaign and no funded opposition. According to Ballotpedia, California voters have passed five previous bonds with funding for housing since 2000 ranging from $500 million to $6.38 billion, the last one in 2024. Proposition 1’s $10 billion in housing general obligation bond funds ($1.25 billion of this proposition is repaid by veterans’ loan payments) is larger than any housing bond the Legislature has placed on the ballot.

Some thoughts for consideration:

• The bond’s repayment costs are modest relative to the State budget. According to the Legislative Analyst’s Office, the state is currently paying about $6 billion each year from the General Fund to pay repay various bonds, and expects the state to continue paying a similar amount over the next few years. This is about 3% of the state’s annual General Fund revenue, which is lower than the historical average of about 4%. For this $10 billion bond program, the LAO estimates annual payments would equal about one-quarter of 1 percent of the State’s General Fund budget. According to the Senate Appropriations Committee, the State would pay about $7.4 billion in interest on the $10 billion general obligation portion over 30 years, assuming the 4.02% average rate the State secured on bond sales in 2025. If rates rise to 5%, interest would grow to about $9.5 billion. Since units funded by the bond must remain affordable for 55 years, a voter may reasonably conclude that future taxpayers should share the cost, which is what bond financing is designed to do.

• State funding leverages federal tax credits and other funds. According to the California State Assembly’s Housing and Community Development Committee analysis, every dollar under this bond is expected to leverage four dollars from federal tax credits, private investment, rent, or other funding. Interestingly enough, President Trump’s “Big, Beautiful Bill” significantly expanded the amount of money available for federal tax credits, so California has an opportunity to secure additional federal funds if more State funds are available; a trusted housing expert told us there are over 40,000 units of affordable housing units ready to go if the bond passes. One of Petrea’s favorite things to do for her local government clients is help them identify state funding opportunities that can serve as a match for federal funding opportunities, therefore reducing how much the local government must pay for a public project, so she likes this approach.

• Money primarily goes to existing programs. Most of these bond funds will go to existing programs with a proven track record of producing housing units. A voter could argue these programs could operate more efficiently and effectively. Since they already exist, however, they will not require substantial new investment to produce results.

• Other affordable housing funding is available. While funding from past housing bonds are exhausted, the State has some ongoing funding for affordable housing. The State currently allocates up to $800 million annually from the Greenhouse Gas Reduction Fund to the Affordable Housing and Sustainable Communities Program at the Strategic Growth Council, which according to the Assembly Committee on Housing and Community Development analysis has produced 15,324 affordable housing units since 2015. (The Greenhouse Gas Reduction Fund is the State’s share of auction proceeds from the Cap-and-Invest Program, formerly cap and trade, which requires large emitters to buy permits from the state to emit greenhouse gases.) Since the Greenhouse Gas Reduction Fund revenue varies depending on permit sales and is expected to decrease in the future, funding to the Affordable Housing and Sustainable Communities Program could also decrease over time. Also, according to the Assembly Housing and Community Development Committee, a 2017 law also placed a $75 recording fee on some real estate documents, which generates $300 million to $500 million every year for affordable housing. Seventy percent of these funds go to local governments to spend on housing priorities and the remainder is split between the CalHFA Mixed Income Housing Program, the Joe Serna, Jr. Farmworker Housing Program, and funds for a state incentive program.

• Infill Infrastructure Grant Program receives a boost. Petrea has a soft spot for the $500 million allocated in this bond to the Infill Infrastructure Grant Program, which provides funds to build infrastructure (e.g., water and sewer systems, bridges, and roads) for high-density affordable and mixed-income housing in locations designated as infill. Petrea is working with a medium-sized California city where one of the main obstacles to building 700 units for about 2,000 people is a bridge over a railroad track that neither the developer nor the city can afford. Her funding strategy for the project found the bridge is eligible for this program (and potentially competitive) and bond funds could be paired with federal grants to close the gap. She thinks this program encourages positive private-public partnerships to build more housing near jobs and city services.

• Cost reduction measures are moving forward. In Petrea’s years tracking legislation in the Capitol, she can’t remember a time the State Legislature passed significant changes to the California Environmental Quality Act in opposition to environmental groups. That changed in 2025, when Governor Newsom made CEQA reform a condition of signing the state budget. The resulting laws (AB 130 and SB 131) exempt most qualifying infill housing projects from CEQA review and streamline review for projects that narrowly miss qualifying. The reforms are too new to know how much they will reduce costs, but they mark a significant shift.

If you think the State is already providing sufficient ongoing funding for affordable housing, that the State should do more to cut the cost of constructing housing before authorizing a large bond, or you’re worried taking on $10 billion in additional debt is unwise given the State’s existing bonded indebtedness and predicted ongoing budget deficits, you may want to vote no. The Hoover Institution’s analysis of Proposition 1 risks and benefits is worth a read if you need more information about these concerns.

If you think existing funding sources are falling short, the State’s cost-cutting reforms are a meaningful start, and these bond funds can leverage federal and other dollars to speed up affordable housing construction through proven programs, you may want to vote yes. Petrea’s brother Noah benefited from low-income housing, made possible by one family’s generosity combined with government funding, when he was struggling with a serious mental illness. The Marchand family knows firsthand the importance of private and public investment working together to provide affordable housing. We are voting yes.

Proposition 2: Increases State Rainy Day Fund

Marchand Recommendation: YES

Who put it on the ballot: The Legislature

Summary

• Increases California’s Rainy Day Fund, approved by voters in 2014, to provide funding for education, health care, public safety, and other essential services during economic downturns.

• Doubles the budget reserve cap from 10% to 20% of General Fund revenues, requiring savings until Fund’s balance equals 20% of General Fund.

• Requires additional savings in years when tax revenues are high.

• Increases budget reserves available for education, state debts, and pension obligations.

Our Analysis

Thought this would be an easy one? Check the box because you know you’re supposed to save money for a rainy day, and the State should as well? Well, not so fast.

The title and summary and the neutral Legislative Analyst’s analysis in the Official Voter Information Guide don’t tell you what Proposition 2 may mean for your wallet. Buried in this measure is a change to the State’s Gann limit (called the “state appropriations limit” in your guide) that will reduce the chances a taxpayer ever receives a rebate. The Gann limit is a 1979 proposition, passed by the voters by a whopping 74% to 26%, which limits State government spending to increases in inflation and population, and requires the State to split revenues above the limit between taxpayer rebates and schools.

Today, money the State deposits in the Rainy Day Fund counts toward the Gann limit. Starting in 2027-28, Proposition 2 would stop counting those deposits until the State withdraws and spends the money, giving the Legislature a new way to stay under the limit in boom years. On the plus side, the State will save more money for tough times. But taxpayers are also less likely to ever see a Gann rebate.

MAPA points out the decreased potential for a rebate because so many Californians are concerned about the cost of living, inflation, and the economy (see September 30, 2026 NBC poll results). In the limit’s 47-year history, MAPA can only find two times the Gann limit led to taxpayer rebates. The first was in 1987 under Republican Governor George Deukmejian; according to a 1987 Los Angeles Times article, Governor Deukmejian provided individual taxpayers up to $118 ($343 in 2026 dollars) and couples up to $236 ($685 in 2026 dollars). In 2021, the Governor’s budget projected State revenue would exceed the Gann limit by $16.2 billion. Governor Newsom, during the COVID-19 pandemic and under threat of a recall, sent “Golden State Stimulus” payments of up to $1,100 to Californians earning up to $75,000, on top of an earlier $600 payment to lower-income households. The Governor described the payments as a rebate under the Gann limit and sent half the excess to schools. By the time the Legislature passed the final budget, the Legislative Analyst reported the State was no longer expected to exceed the Gann limit.

(MAPA notes education advocates were unhappy Governor Deukmejian authorized the 1987 rebates instead of more funding for education. Education advocates responded in 1988 and successfully passed Proposition 98, which guarantees a minimum level of school funding every year and steered excess Gann revenue toward schools.)

When revenues threaten to breach the Gann limit, the State has legal ways to avoid triggering a rebate:

• Relabeling spending as “emergency” or “infrastructure.” The Constitution excludes emergency spending, capital outlay, local subventions, debt service, and certain mandates from the limit. In 2022, the State classified a $6.5 billion school learning recovery grant as emergency spending and $1.35 billion for zero-emission school buses as capital outlay.

• Moving money into excluded categories at scale. The 2022-23 budget included $23.7 billion in discretionary spending excluded from the limit. The Legislative Analyst cited that excluded spending as a key reason the State ended up under the limit.

• Choosing targeted tax credits over broad rebates. Reducing revenue also creates room under the limit. In 2022, the Governor proposed about $6 billion in revenue reductions alongside $6.5 billion in excluded spending to stay under the cap.

MAPA considers these machinations “financial gymnastics” that reduce the transparency of the State budget process and weaken incentives to cut spending or improve government programs. The 2/3 Democratic majority in both houses of the State Legislature also means there is little need to compromise with more conservative lawmakers to implement measures to increase government efficiency and effectiveness. MAPA knows from personal experience that government can and should do better.

On the flip side, California relies heavily on high-income taxpayers, whose incomes rise and fall with the stock market, to fund State and local government services. The Legislative Analyst notes that in a bad recession, revenue declines over a few years can equal 50% or more of a year’s General Fund revenue. These swings make it difficult to sustain State programs and local services funded by the State. Under current rules, saving in boom years counts against the Gann limit, which can push the State to spend money it would rather set aside. MAPA’s favorite fiscally responsible Governor, Jerry Brown, strengthened the Rainy Day Fund with 2014’s Proposition 2, alongside his efforts to cut spending and balance the budget. This year’s Proposition 2 builds on that work; it doubles the cap to 20%, requires bigger deposits when investment-related tax revenue surges, and extends required extra debt payments through 2040.

Bottom line: if you want to preserve the chance that you or someone you know might receive a tax rebate in the future, vote no. If you think the Democratic majority will hold for the foreseeable future and therefore rebates are unlikely regardless of whether Proposition 2 passes, you might as well make the State save more, smooth out revenue swings, and rely on fewer financial gymnastics— and vote yes.

This was a tough one for us, since we think State and local government should increase efficiency and effectiveness, plus Democratic State elected officials (except MAPA’s favorite Governor Brown) have not traditionally focused enough on doing more with less – which is what most Californians must do every day. But with a 2/3 Democratic majority in both houses and too few voters clamoring for accountability and increased efficiency, saving more for a rainy day may be the best we can do. So, we are voting yes.

Proposition 3: Provides Permanent Funding for Schools and Health Care by Extending Existing Tax on High Incomes

Marchand Recommendation: YES

Who put it on the ballot: Citizens’ initiative, with primary financial support coming from the California Teachers Association (CTA contributed over $33 million; next highest was the National Education Association at $4 million).

Summary

• Makes permanent the existing 2012 voter-approved tax rates for high-income Californians, currently set to expire in 2031.

• Rates apply to income over $371,000 for single filers, $742,000 for joint filers, and $505,000 for heads of household (2025 levels; adjusted annually for inflation).

• Allocates tax revenues 89% to K-12 schools, 11% to community colleges.

• Allow local school boards to decide how revenues are spent; bars use for administrative costs.

• Increases General Fund revenues available for health care, budget reserves, and other programs.

Our Analysis

This initiative is pretty straightforward; it is a constitutional amendment that makes the current top income tax brackets, which have been in effect since 2012, permanent. If this initiative fails, the top three tax rates go away after the 2030 tax year, and the top bracket will return to 9.3%. Income above $1 million is also subject to a separate 1% surcharge for mental health services, approved by voters in 2004 as Proposition 63. Proposition 3 does not affect that surcharge, so if this measure fails, the top rate would drop to 10.3%.

In 2012, California voters approved a constitutional amendment (Proposition 30) to temporarily increase the top income tax rates for individuals making more than $250,000, or joint filers making more than $500,000, for a period of 7 years, through the 2018 tax year. Prior to the 2012 ballot proposal, the top rate was 9.3%, and Proposition 30 added three new top brackets: 10.3%, 11.3%, and 12.3%, depending on income level (again, there is an additional 1% rate on income above $1 million). In 2016, California voters approved Proposition 55 to give an additional 12-year extension of these tax rates through the 2030 tax year. This year’s Proposition 3 makes these higher tax brackets permanent. While the original 2012 measure started the higher rates at $250,000 for single filers and $500,000 for joint filers, these tax brackets were indexed to inflation, so the current tax brackets for these three top rates are as follows:

Single Filer	Joint Filer	Tax Rate
$371,000 to $446,000	$742,000 to $892,000	10.3%
$446,000 to $743,000	$892,000 to $1.5 million	11.3%
Above $743,000	Above $1.5 million	12.3%

Source: 2025 tax year thresholds from the Franchise Tax Board’s 2025 California Tax Rate Schedules. Brackets are adjusted annually for inflation.

The Legislative Analyst’s Office (LAO) estimates the annual revenue from these top rates brings in approximately $5 to $15 billion (because income of the wealthy is closely tied to the stock market, tax revenue from top earners fluctuates significantly depending on how the stock market performs).  California’s General Fund is approximately $250 billion, so these top rates bring in roughly 4% of our total General Fund in an average year. As the official summary notes, the revenue is deposited into an Education Protection Account and divided 89% to K-12 schools and 11% to community colleges. Since these funds count toward the state’s existing minimum funding guarantee for schools, however, they largely replace money schools would have received from the General Fund anyway. As a result, the LAO estimates that only about 40% of the revenue increases school funding; the rest effectively frees up General Fund money for health care, budget reserves, and other programs.

The knock on Proposition 3 is that these tax increases were sold to voters back in 2012 as a temporary measure to prevent further cuts to schools at a time when budget shortfalls as a result of the housing collapse and resulting recession had already led to significant cuts to schools and other programs. Opponents also object that locking these rates into the Constitution removes flexibility, since any future change would require another statewide vote. That is a fair point, but it is the same structure voters approved in 2012 and again in 2016; the rates have always been constitutional and beyond the Legislature’s reach. The only real change is the removal of the expiration date, which would otherwise force this same question back onto the ballot every decade or so.

Since 2012, the budget has grown significantly as revenues have increased along with the stock market, and it should have been possible to plan for the eventual loss of these high tax rates after the 2030 tax year. On the other hand, there is significant income inequality in California. According to an April 2026 study by the Public Policy Institute of California, income inequality in California has grown substantially over the years. Since 1980, the gap between the top and bottom incomes has increased by 57%, reflecting a 72% income growth for the 90^th percentile, and a 19% growth for the 10^th percentile. In 2024, California families at the 90th percentile of the income distribution earned 11 times more than families at the 10th percentile ($356,000 vs. $33,000).

Proposition 3’s rates apply to an even narrower group than PPIC’s top earners: only taxpayers with incomes above about $371,000 for single filers or $742,000 for joint filers, which represents the top 2% of California taxpayers. Proposition 3 asks these highest earners to keep paying at current rates to support schools and other programs that serve families across the income spectrum.

If you think these “temporary” tax rates should expire because that was the original pitch to the voters in 2012 or should not be made permanent, vote no. If you think California’s top tax rates are too high, vote no.

If you think it is appropriate to ask these highest earners to keep paying at current rates to help address income inequality, and to ensure the State does not have to cut existing programs because of a decline in revenue (the State is projecting significant budget deficits in the next few years even with this revenue in place), then vote yes.

While opponents argue high tax rates chase the wealthy to other states (see our analysis of Proposition 40 for a discussion of this argument), these are taxes that have already been in effect since 2012, so that argument does not resonate with us. We have watched many of the wealthiest Californians grow much wealthier over the past decade, so we think it is appropriate to maintain these tax rates. As with our analysis of Proposition 2 (Rainy Day Fund), we wish this tax measure were accompanied by measures to improve government performance. But we are voting yes.

Proposition 4: Repeals Prohibition Against Public Funding of Election Campaigns

Marchand Recommendation: YES

Who put it on the ballot: The Legislature, via SB 42 (Umberg) of 2025.

Summary

• Current law prohibits state and local governments from using public funds for election campaigns except in charter cities and counties.

• This measure repeals that prohibition and allows state and local governments to establish public campaign financing programs for candidates who agree to specified spending limits and meet eligibility criteria.

• Prohibits public funding programs from using funds earmarked for education, transportation, or public safety

• Prohibits candidates from using public funds for legal defense costs, fines, or repayment of personal loans to campaigns

• Triples maximum fines for campaign contributions by foreign entities

Our Analysis

In 1988, there were two competing initiatives on the ballot seeking to impose certain campaign financing restrictions.  Proposition 68 was supported by the League of Women Voters, California Common Cause, Consumers Union, and other “good government” organizations. Proposition 73 was written by a trio of then-sitting legislators: Ross Johnson, a conservative from Orange County; Quentin Kopp, an independent from San Francisco, and Joseph Montoya, a Democrat from Los Angeles. While both contained contribution limitations, Proposition 68 set up a system of campaign expenditure limits along with public financing for candidates who agreed to the limitations. Proposition 73, on the other hand, prohibited public financing of campaigns. Voters approved both propositions, but Proposition 73 got more votes so Proposition 68 was nullified. Two years later, courts ruled the campaign contribution limits of Proposition 73 were unconstitutional, leaving only the prohibition on public financing of campaigns in effect. There have been various attempts over the years to undo this prohibition on public financing of campaigns, including a 2016 law by Senator Ben Allen. The courts overturned this law, however, by ruling that the repeal of a voter-approved ban on public financing requires voter approval.

While the majority of California’s cities are “general law” cities and must conform to Proposition 73’s prohibition on public financing of campaigns, California has a number of “charter cities,” where voters approve their own constitution (city charter) that grants them broad authority to write their own rules, including the ability to establish public financing of campaigns for office within that city. While only 121 of the 482 cities in California have charters, they tend to be the largest cities. Five of them have established some form of public campaign financing system: Los Angeles, Berkeley, Long Beach, Oakland, and San Francisco. This proposition would allow the rest of the cities, as well as counties, the ability to establish (via a locally adopted ordinance) a public financing mechanism in their jurisdiction. It would also permit the State to pass a bill to do this for the Assembly, Senate, or statewide offices.

The idea behind public campaign financing systems is to make it possible for ordinary people of modest means to compete against wealthy and politically connected candidates. While there are various models, candidates are required to agree to campaign spending limits to receive public funds.  Additionally, a candidate usually must demonstrate a sufficient level of support by obtaining small donations from a minimum number of people. In a typical system, candidates who meet certain requirements can receive matching funds for small dollar donations, up to a specified limit. An alternative mechanism that was adopted recently by Oakland is to give all residents a voucher they can assign to the eligible candidate or candidates of their choice (in Oakland, voters will receive $100 “Democracy Dollar” vouchers). Since the Supreme Court has struck down mandatory limits on campaign spending, however, public campaign funding systems must allow candidates to opt out of any public funding mechanism that limits their ability to spend. 

As an aside, you may have noticed the little box on your tax return asking if you want $3 to go toward the Presidential Election Campaign Fund, which is intended to provide matching funds to presidential candidates who agree to spending limits. Prior to 2000, presidential candidates commonly accepted these matching funds and agreed to spending limits. However, when then-candidate Barack Obama in 2008 declined to participate in the Presidential Election Campaign Fund, even though John McCain had already opted in, it basically signaled the death of the program. Among other problems with the program, campaigns are now too expensive for the fund to keep up, and candidates are better at raising their own money. The money in the Fund just continues to pile up unclaimed, though fewer people are checking the box these days. The lesson is that a voluntary public financing system only works if the public money is worth more to candidates than the freedom to raise and spend without limits.

MAPA is not convinced that in most jurisdictions, using local tax dollars for a public campaign financing program is the best use of those dollars. Proposition 4 does not set limits on the amount a local government can appropriate for elections, the people running for office are in charge of making the decisions regarding the appropriations, and the measure does nothing to prevent third parties such as independent expenditure committees from spending unlimited amounts to support or oppose candidates regardless of whether the candidate has opted into spending limits. This makes it hard, in our view, to make meaningful progress in leveling the playing field with limited public funds. If these arguments resonate with you, vote no.

However, just because we personally aren’t sold on the benefits of public campaign financing doesn’t mean we think cities or other local jurisdictions should be prohibited from setting up a system if that is what their constituents want, especially since charter cities already have this option. This is why we have local elections. And maybe, just maybe, more talented, experienced people will run for office if they don’t have to raise funds or contribute their own money to campaign. We are voting yes.

Proposition 5: Changes Recall Election Process for Statewide Officers

Marchand Recommendation: YES

Who put it on the ballot: The Legislature, via SCA 1 (Newman) in 2024.

Summary

• Under current law, voters decide at the same election whether (1) to recall a state officer, and (2) who will replace that officer if recalled.

• Under this measure:

  • if the Governor is recalled, the Lieutenant Governor becomes Governor for the remainder of the term or until a successor is elected;

  • for all other recalled officers, the office will remain vacant until filled by a subsequent special election or appointment as specified in existing law; and

  • a recalled officer may be a candidate in a special election to fill the office.

Note: Despite the ballot title’s reference to “Statewide Officers,” this measure applies to all state officers subject to recall, including members of the Assembly and Senate.

Our Analysis

This story begins in 2017, when the Legislature used its supermajority at the time to muscle through SB 1, the “Road Repair and Accountability Act of 2017,” or more pejoratively, the “gas tax.” Among other things, it increased gas and diesel taxes to raise about $4.2 billion annually for road repairs and other transportation improvement projects. Given the politics, it was a tough vote for marginal members, and none more so than a freshman legislator less than halfway through his first term: Josh Newman. In 2016, Newman had eked out a 2500 vote victory (out of more than 317,000 votes cast). Following the vote on SB 1, Republican strategists seized on the unpopular gas tax vote to launch a recall campaign, with the primary goal being to drop the Democratic advantage in the Senate from its ⅔ majority (able to raise taxes) to a simple majority by taking out a Democrat. Newman, with his narrow margin of victory, was the unlucky target. Long story short, the recall special election in June 2018 was successful, his Republican opponent from 2016 got a plurality of votes on the replacement ballot and was elected in his place, and then Newman defeated her in the next general election in 2020 and returned to the Senate, where he served until 2024.  

Proposition 5, authored by none other than Senator Josh Newman in his last year in office, is intended to address at least some of the misplaced incentives that led to his recall in 2018, the recall of then-Governor Gray Davis in 2003, and the attempted recall of Governor Newsom in 2021. It does not do anything to make it harder to recall someone from office; it only affects the process for how to fill the vacated office.

Under current law, a recall ballot asks voters two questions: (1) Should this person be recalled from office?  (2) If so, who should replace this person? The view of the proponents of Proposition 5 is that recalls should be used for malfeasance in office, and not simply when there is a political disagreement about a policy stance. We have normally scheduled elections for when our politicians simply disappoint us. Because you can instantly get a replacement official on the same recall ballot, who only needs to win a plurality of the vote, it creates an incentive to launch recalls whenever the popularity of the incumbent dips.

In the case of Senator Josh Newman’s recall election in 2018, the recall question passed with 58% voting in favor of the recall, but on the question of who should replace him, there were five candidates vying to succeed him. This led to Ling Ling Chang becoming a State Senator with only 33% of the vote.  Even Arnold Schwarzenegger, in the recall election of Gray Davis in 2003, only received 48% of the vote on the question of who should succeed Gray Davis due to multiple candidates on the replacement ballot.

When a vacancy occurs in the Senate or Assembly for any other reason – a death in office, or a resignation – our laws provide for the Governor to call a special election to fill that seat. If no one gets an outright majority in the special primary election, there is a special general election with the top two finishers. When a statewide office has a vacancy, such as the Attorney General or Controller, the Governor is permitted to make an appointment to fill that seat for the remainder of the term, with the appointee subject to confirmation by the Legislature. If the Governor dies while in office, or resigns for some reason, the Lieutenant Governor takes his or her place.  Why should any of this be different for a vacancy due to a recall?

Proposition 5 removes the second question from the recall ballot about who should replace the official if the recall is successful and simply applies the replacement process used for all other vacancies, with one change: if the Governor is recalled in the second half of their term, the Lieutenant Governor serves the remainder of the term. However, if the Governor is recalled early enough in the term (before the nomination period closes for the next statewide primary), the Lieutenant Governor serves only until a successor is chosen. In that case, a special election for the rest of the term is held alongside the regular primary, with a runoff, if needed, alongside the general election.

The argument against this change to the constitution is that if an Assemblymember or State Senator is successfully recalled, there will be a period of time before a special election is held to replace that person, leaving that region without full representation. Upon a vacancy, the Governor has 14 days to call a special election, which must be held between 126 days and 140 days from when the special election is announced. However, this can be extended to up to 180 days if it can be consolidated with a regularly scheduled election.  Basically, if Proposition 5 is approved, there could be a vacancy of up to 6 months (it can be as short as less than three months if someone is able to get a majority in the special primary election).  Note, this is only for legislative seats: statewide constitutional officers are filled through the appointment process (or by the Lieutenant Governor in the case of a Governor vacancy). Since this is the same process used when a legislator resigns in the middle of their term, it is not clear to us why a recall should result in a different process.

If you believe a recall election should include an election for someone to replace the recalled official, even if that person is elected by less than a majority, vote no. We are firmly in the camp that the recall process has been misused, and that the question of whether a politician should be recalled from office prior to the completion of their term should not be intermingled with the question of who should replace the person being recalled. The current process, by allowing alternative candidates to appear on the ballot, incentivizes relitigating close elections when the result doesn’t go a particular side’s way. The recall ballot should have one question: does this person deserve to be recalled or not. We are voting yes.

Proposition 37: Creates Loan Program for Middle-Income Buyers of Qualified New Homes

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, brainchild of former legislator Bob Herzberg, with primary financial support from the California Association of Realtors.

Summary

• Authorizes up to $25 billion in bonds to offer eligible buyers fixed-rate mortgages for up to 17% of the purchase price of a “qualified new home” (new construction or first sale of converted nonresidential property, priced below about $1 million–$1.5 million, depending on county, adjusted annually).

• Borrowers must be California residents for one year, occupy the home, earn less than twice the area’s median income, and pay at least 3% down.

• Requires that bonds be repaid by homeowners’ mortgage payments, not the State.

Our Analysis

This one is odd in that it seems relatively uncontroversial, with no listed opposition, and yet the author, former Speaker of the Assembly Bob Hertzberg, attempted multiple times to get a version of this through the Legislature, and was not successful. Those bills were more complicated, and had more controversial provisions, and yet here we are with a citizens’ initiative instead of something passed by the Legislature and worked out through the committee process. It gives us pause.

The concept behind this initiative is a down payment assistance program to help middle class home buyers purchase homes by providing a separate loan for 17% of the purchase price. The home buyer would only have to put 3% down, and get a traditional mortgage for the remaining 80%, thereby presumably avoiding the cost of private mortgage insurance (PMI), which is generally required by the mortgage lender when the loan is for more than 80% of the home’s value.  The funding to provide the down payment assistance loans would come from the sale of up to $25 billion in revenue bonds – bonds that would be paid back by the borrowers, so the state is not on the hook. The program would be administered by the California Housing Finance Agency (CalHFA).  The down payment assistance loans will only be available to purchasers of newly constructed units where they are the first occupants. The idea is to incentivize new housing units, due to the housing shortage, but new construction is a small percentage of the housing market, so it will limit the reach of the program. Additionally, it limits eligibility to home buyers who have been California residents for at least one year, and who earn no more than 200 percent of the area median income. Finally, it caps the price of the homes to a maximum of 125% of the federal conforming loan limit for a one-unit property. The current baseline conforming loan limit in California is $832,750, while high-cost counties go up to a maximum ceiling of $1,249,125.Separate from the down payment assistance program, Proposition 37 also contains provisions that would allow builders who agree to adhere to certain labor management standards to benefit from what appear to be modest reforms to the process of resolving construction defect claims. These changes are beyond our expertise, but we have reached out to those who work in this area, and they did not raise any major red flags.

After talking to people who know more about housing financing than we do, we are not convinced that this is going to work. In the event of foreclosure, the bank with the first mortgage (the 80% loan) has priority in recouping their debt. That means the down-payment loans will have to have a higher interest rate to compensate the bond market for the higher risk. The two loans together might end up costing just as much as having a 97% mortgage and paying the PMI. But whether it works as intended or not, it doesn’t appear to cause harm.  In this case, we revert to our priors: if the Legislature put it on the ballot, we need a reason to vote no. In the case of a Citizens’ Initiative, we need a reason to vote yes.  This doesn’t meet the bar for us, so we will be voting no. But if you think this will help more Californians purchase homes, and spur additional construction, you may want to vote yes.

We recommend a NO vote.

Proposition 38: Authorizes Bonds for Immunology Medical Research

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, paid for almost exclusively by billionaire Gary Michelson.

Summary

• Authorizes $8.4 billion in state general obligation bonds for immunology and immunotherapy research (technologies that use body’s immune system to treat disease), with half dedicated to cancer, heart disease, and Alzheimer’s disease.

• Allocates funds equally between (1) a single University of California-affiliated nonprofit medical research institute, and (2) research grants for public or nonprofit universities and institutions.

• Requires funding recipients to sell technology and drugs derived from research in California for 20% below national average price.

• Appropriates money from General Fund to repay bonds; General Fund receives 10% of licensing royalties until bonds are repaid.

Our Analysis

Historically, public funding of medical and other forms of research is done at the federal level, at least partly because any new technologies or medical breakthroughs arising out of such publicly funded research would benefit people all across the country. Of course, there is public funding of California colleges and universities, but we do not generally use bond funding to support research. The first major exception came in 2004 when voters approved Proposition 71 to provide $3 billion in bond funding to support stem cell research by establishing the California Institute of Regenerative Medicine (CIRM). In 2014, voters gave CIRM another $5.5 billion. Like Proposition 38, Proposition 71 was primarily the brainchild of a single wealthy individual, Robert Klein. However, the political context in 2004 was a decision by then-President George W. Bush to prohibit federal funding of embryonic stem cell research, providing something of a policy rationale for states to step up. The argument this time around is President Trump’s cuts to federal research funding.

Since returning to the Presidency, President Trump's administration has paused or cut tens of billions in federal research funding, and California’s research universities are highly dependent on federal funding. In response, the Legislature just this year approved legislation to establish the California Foundation for Science and Health Research (CFSHR), which would provide $7.5 billion in bond funding if the voters approve it on the March 2028 primary election ballot. The CFSHR would provide competitive grants to support a wide spectrum of research activities, not just biomedical and disease prevention and treatment research, but climate research and wildfire prevention research.

Unlike the CFSHR, which went through a legislative process and does not predetermine where the grants will be awarded (aside from set asides for up to $250 million for the UC, and up to $750 million for CSU, for facilities that support research), Proposition 38 allocates half of the $8.4 billion in general obligation bond funds to something called the California Institute for Immunology and Immunotherapy, which the proponent of this initiative founded only two years ago in partnership with UCLA, and still serves as chair. Worse, Proposition 38 wants public bond funding, but has exempted this institute from the Bagley-Keene Open Meeting law that applies to other public agencies, and to the Public Records Act.  Prop 71 back in 2004 did not exempt CIRM from open meeting and public records act laws.

We would be inclined to recommend a no vote even if the funds were competitively awarded; with the self-dealing, and exemptions from our transparency laws, this is an easy no recommendation. If you want to support state funding of scientific research, you will have an opportunity in March of 2028 for a slightly smaller bond proposal that is truly competitively awarded and is not shielded from transparency and accountability laws. We are voting no.

Proposition 39: Prohibits Citizens from Voting Unless They Present Government-Issued Identification

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ initiative, led by conservative Assemblymember Carl DeMaio

Summary

• Prohibits voting by mail unless voter designates a government-issued identification number for their voter registration

• Invalidates mail ballots if envelope does not include last four digits of a government-issued identification number matching the number designated in the voter’s registration (e.g. if voter designates Social Security number for registration, but provides driver’s license number on envelope, their ballot would not count).

• Prohibits voting in person without presenting government-issued identification

• Requires elections officials to annually report percentage of each county’s voters whose citizenship they have verified

Our Analysis

As MAPA has said many times in the past, we start with the assumption of “no” on citizens’ initiatives, but then always weigh the measure carefully to determine our official recommendation. We have this approach because as policy nerds, we need to understand the problem the proposition is trying to solve and whether the proposed solution addresses the perceived problem. Too often, wealthy individuals or well-heeled organizations fund citizens’ initiatives to further policies for which they could not secure support in the State Legislature; the major problem with citizens’ initiatives is they are often not appropriately vetted or drafted to address the intended issue. Once enshrined in State law, a poorly drafted citizens’ initiative can have unintended consequences which are very difficult to unwind.

Proposition 39 is a solution in search of a problem; it proposes a solution to voter fraud that does not appear to exist. Specifically, Proposition 39 requires voters to show government-issued ID at the polls, and mail voters to write the last four digits of a designated ID number on their ballot envelope. California currently confirms ballots by matching the signature on the ballot envelope to signatures on file, as well as requires a California driver’s license or ID number, or the last four digits of a Social Security number, to register to vote. MAPA reviewed available information about potential voter fraud in California, including a 2026 literature review completed by the California Research Bureau for the California State Senate Elections Committee. The California Research Bureau’s review found just 10 cases from 2020–2024, two of which ended with no finding of wrongdoing. Most of the rest involved candidates registering at addresses where they did not live or schemes to fraudulently register voters; existing safeguards caught several, rejecting fraudulent ballots or overturning results. None involved someone impersonating another voter at the polls, the problem an ID requirement at the polls is meant to solve. Grand juries in 14 counties found no evidence of voter fraud over the same period.

California’s proposition process is unwieldy enough without having out-of-state billionaires providing funding to place an initiative on our statewide ballot. This CalMatters article provides a good summary about the authors of the initiative and donors who provided funding; according to Ballotpedia, $17 million of the $30.7 million donated so far to the support campaign is from Richard Uihlein, a billionaire in Illinois. On the opposition side, the top donors to the $15.8 million campaign are all California-based.

On the other hand, California is one of 14 states remaining without a voter ID requirement. According to an August 2025 Pew Research Center poll, 83% of U.S. adults support requiring government-issued photo ID to vote. Californians show similar support in principle, but that support drops sharply once voters learn the details of Proposition 39. In a September 2026 PPIC survey, 43% of likely voters supported Proposition 39 and 55% opposed it. For a thoughtful conservative article about Proposition 39 and voter ID requirements, read the Hoover Institution’s analysis.

If you think fraud is a significant or not fully understood problem in our elections system, vote yes. If you do not think there is fraud in our elections system, vote no. MAPA does not like it when people outside of the State interfere in our elections and has not yet seen evidence of anything other than rare voter fraud. We could be convinced to vote for improvements to the voter registration process in the future, through a different process. We recommend voting no on Proposition 39.

Proposition 40: Imposes One-Time Tax on Certain Taxpayers

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, sponsored and primarily financed by SEIU – United Healthcare Workers (SEIU-UHW)

Summary

• Imposes one-time tax of up to 5% on certain taxpayers with covered assets valued over $1 billion; covered assets include businesses, securities, art, collectibles, and intellectual property, but exclude real property and some pensions and retirements accounts.

• Allocates 90% of these tax revenues for health care, 10% for food assistance or education-related programs; prohibits using revenues to replace existing funding for these purposes.

• Exempts such tax revenues form constitutional requirements for school funding, budget reserves, and state spending limit.

Our Analysis

Where to begin? If you are reading this, you have almost certainly heard about the Billionaire Tax Act, and probably already understand that it proposes to levy a one-time 5% tax on the total assets of those individuals who are estimated to have a net worth in excess of $1 billion. This initiative is brought to you by SEIU-UHW, the serial abusers of the initiative process who are also sponsoring Proposition 44’s attack on community clinics this year, and who brought you all those dumb dialysis initiatives in the past. This one, at least, is not rooted in an organizing campaign, but in a true belief that billionaires are not paying their share, and to counteract the very big health care cuts coming from the Trump administration.

Proponents cite the Forbes billionaire list as of January 2026, which identified 213 California billionaires with a collective worth of $2.18 trillion. A 5% one-time tax on $2.18 trillion suggests a total possible tax of $109 billion, though the non-partisan Legislative Analyst’s Office simply estimated “tens of billions of dollars.” The initiative allows for billionaires to pay this in installments over five years in equal payments, with a 7.5% additional fee on the remaining unpaid balance of the tax each year. For this one, we thought we’d touch on some key points and areas of controversy:

What is included in the net worth calculation? The calculation of a billionaire’s net worth includes almost all worldwide assets with a valuation date of December 31, 2026, with a handful of specific exemptions: real estate that is held directly or through a revocable trust is excluded; 401ks and traditional IRAs are also excluded, as are Roth IRAs but only to the extent that the cumulative value of the Roth IRAs does not exceed $10 million; there is a $5 million exclusion for art and collectibles, and an exclusion for tangible personal property kept outside California for 270 days in 2026 as long as it wasn’t relocated for purposes of avoiding the tax. 

How will it work? For most of us, there will be a new line on our tax return forms that asks us to declare that we are not worth more than $1 billion. For the lucky 200 or so, they will need to scramble to assess the value of all their worldwide assets, using various methods outlined in the language of the initiative, and submit a declaration of the amount of tax that is owed, along with any required appraisals or other evidence of fair market value. For some assets, such as those that are in publicly traded companies, the fair market value is whatever the asset’s market trading value is on the valuation date of December 31, 2026. For private holdings, Proposition 40 includes a formula where the private business interest is presumed to be worth the entity’s book value, plus 7.5 times its average book profits, times the taxpayer’s ownership share. No, we can’t explain it further. Either the taxpayer or the Franchise Tax Board can challenge the presumed value of an asset with a certified appraisal with clear and convincing evidence that it substantially misstates value. There are penalties for any appraiser who substantially low-balls a valuation. No asset can be valued for less than its insured value. Net worth can be reduced by debts, but only if the debt is a “recourse debt,” meaning that the borrower is personally liable for repayment of the debt.  

We think this is going to be messy. A tax of this magnitude, trying to reach all aspects of a very wealthy person’s net worth, would be very challenging to effectively implement with years of preparation. The FTB is not going to have much time to develop guidelines and the various forms, though the initiative does provide for a six-month extension to file taxes. Filing tax returns involves a lot of third-party reporting. We are all required to report our income to the IRS and FTB, but the tax agencies also get a lot of third-party reports when stocks or bonds are sold, so they can check some of our math. Billionaires hold all kinds of assets for which third party reporting doesn’t necessarily exist. The good news for the FTB is that there are only about 200 individuals on which they need to focus, they have a pretty good idea of who they are, and there are stiff penalties if they catch someone underreporting their net worth. The bad news is that billionaires can lawyer up big time. One indication that even the proponents are anticipating a challenging implementation is the initiative gives the FTB a $50 million start-up loan, to be repaid with the tax proceeds, just for the first year of costs in administering the wealth tax.

What will the tax proceeds be used for? Proponents have pointed to the cuts to the Medi-Cal program, enacted as part of HR 1 (the so-called Big Beautiful Bill), as the driving force for the wealth tax. California is facing tens of billions in federal funding losses due to changes in eligibility and other requirements, most of which start to take effect in 2027. It is true that the cuts will have a devastating effect on our health care safety net. To counteract these cuts, Proposition 40 allocates 90% of revenue (after administrative expenses are taken out) to be used for health care funding, including to restore or address reductions in federal funding, and 10% to education-related and food assistance expenditures. There is non-supplanting language intended to prohibit the wealth tax proceeds from being used as justification for reducing other state appropriations for health care, education or food assistance programs. The initiative exempts the revenue from this tax from the state spending limit (known as the Gann limit, see our analysis of Proposition 2), and from the Proposition 98 guarantee that 40% of all General Fund revenue go to schools. Both of these provisions are necessitated by the nature of a one-time, massive influx of revenue. Keep in mind is that this initiative tells the Legislature where to spend the funds, also known as ballot box budgeting; there is no process to determine State priorities and allocate the funds to the highest need.

Isn’t this a retroactive tax? How is that constitutional? This will certainly be tested in court if Proposition 40 prevails, and we are not attorneys. Insert shrugging hands emoji. We have read arguments on both sides. However, it has been pointed out to us that Proposition 40 applies to the 2026 tax year, which is the same year in which voters will decide this initiative. There is a lot of precedent for changing tax law in the middle of the current tax year. Even if the retroactive nature of the tax is legal, there are other avenues that opponents will seek to challenge in court, including its reach to out-of-state trusts. The initiative includes some provisions intended to expedite the anticipated legal challenges, including requiring an action to determine whether the provisions in Proposition 40 are constitutional or otherwise facially invalid to be filed within 60 days of the initiative being approved. Requires the venue to be the Sacramento County Superior Court, and any appeal from that result to be made directly to the California Supreme Court, without intermediate appellate review.  Requires the Superior Court to make every effort to resolve the action by April 1, 2027, and the Supreme Court to resolve any review by November 1, 2027. 

Won’t this chase the ultrawealthy out of California, depriving us of an important tax base? This is the big question. To what extent will this tax, or the cumulative weight of California’s tax policies, drive the wealthy to relocate to low tax states like Florida, Texas, or Nevada, thereby threatening the state’s reliance on a progressive tax structure?  A column in CalMatters cited a number of studies that suggested this is mostly a myth, stating that “it’s much easier for a rich person to threaten to leave than actually do it, as years of studies on millionaire migration have shown.” The author went on to quote a Cornell researcher who summed up low rates of tax flight by pointing out that “these people are just very embedded in the places where they’ve built their careers, and have a lot of ties to where they live and work.”

And yet. This tax might be different. The very, very wealthy don’t actually pay all that much in income taxes. They are not typically wage earners, but own a lot of assets that appreciate over time. To avoid triggering capital gains taxes by selling these assets, they instead borrow against them, using the assets as collateral, and spend the borrowed money tax-free. In fact, it is this tax avoidance that is one of the driving forces for a wealth tax: the wealthy keep getting wealthier and most of their wealth is beyond the reach of taxation. Proposition 40, because it actually will result in some hefty tax bills for billionaires, might be the thing that causes folks to leave.

To be fair to the proponents, they have gone to some effort to avoid this outcome. First, it applies to anyone who was a resident as of January 1, 2026. Anyone who attempted to move out of state on or after that date cannot avoid the tax. And since it is a one-time tax, there is arguably no point in moving now since you are already subject to the tax. Still, there is evidence that some of our richest billionaires may have already moved in time to avoid the tax. Proponents filed this initiative in October of 2025, and it was cleared to begin collecting signatures in December of 2025.  Several big name California billionaires, including Google co-founders Sergey Brin and Larry Page, made several moves in December of last year to cut some ties to the state, including moving certain of their businesses to Nevada and Florida, purchasing homes in those states, and taking other action to presumably claim they were no longer California residents. Those two alone have a combined net worth in excess of $500 billion, meaning that if they are able to demonstrate that they truly changed their residence prior to January 1, 2026, that would mean about one-fourth of the potential proceeds of the wealth tax is already unobtainable, along with whatever taxes they would have paid on an annual basis going forward. Other billionaires, including Peter Thiel, have also said they have left California due to the tax climate. Just because someone has said they have relocated, however, does not mean they will survive a residency audit and avoid the tax. Simply buying a house in another state and saying “I’ve moved” isn’t sufficient. The taxpayer must demonstrate intent to permanently move residences, which involves a lot of factors, including time spent in the new location. We’ve been told a residency audit is complicated and messy. For what it’s worth, the Legislative Analyst’s Office estimated that Proposition 40 could result in the “ongoing decrease of less than $1 billion per year in state income tax revenue collected from billionaires” because of the billionaires choosing to leave the state. 

Isn’t there something about “voting shares” leading to sharply higher asset valuations and massive tax bills much greater than 5%? Since this issue has come up in our conversations over this initiative a couple of times, we will attempt to explain this concern from opponents. In the language of the initiative governing how different assets are to be valued, there is a paragraph that states the following: “For any interests that confer voting or other direct control rights, the percentage of the business entity owned by the taxpayer shall be presumed to be not less than the taxpayer’s percentage of the overall voting or other direct control rights.” Opponents have pointed out that Sergey Brin, for example, owns less than 6% of Alphabet shares (Google’s parent), but has more than 25% of the voting control of Alphabet. If you applied his voting share to the market value of Alphabet, it would quadruple the assessed value of his share of Alphabet. Instead of being worth $300 billion or so, he would be treated as having $1.2 trillion in wealth, even though he doesn’t own that much of Alphabet.  However, this is an incorrect reading of the language, at least with regard to publicly traded companies like Alphabet, Meta, or Nvidia. Without getting too far into the weeds of how that section of proposed law is constructed, the paragraph in question does not apply to any “publicly traded assets.” 

Wait, I’ve been reading for a long time and I still don’t know what you think about all this. This one is hard. We agree that the uber-wealthy should be taxed more than they are. A lot more. According to the economists Emanuel Saez and Gabriel Zucman, who wrote in support of Proposition 40, California’s billionaire class now amounts to more than half of California’s entire annual economic output, despite representing a mere 0.001% of California’s families. According to this article, their income tax payments accounted for only 2.4% of California’s income tax revenue. In fact, we find it infuriating how hard the billionaires are fighting against this. They would all still be billionaires if they just paid the tax. However, we do worry that in an era when it is increasingly easy for the wealthy to choose to live anywhere in the world, assessing a tax of this magnitude, however justified it may be, may very well cause more of these uber wealthy to leave. It is not hard to imagine these individuals believing that if the tax was successful once, it will come back again, and they should get out before the next wealth tax passes. The concentration of wealth in the hands of a few is a problem, but it is a national problem, and we would prefer a national solution.

So. Vote yes if you believe that the one-time nature of the tax, and the fact that you can’t avoid it if you didn’t leave the state before January 1 of this year, means that it will not cause billionaires to flee California in significant numbers, and our future tax revenue will not take a significant hit. Or maybe vote yes just to send a message. Vote no if you believe this might be the tax that breaks the proverbial camel’s back and causes more wealthy individuals to leave California than already have. Or vote no if you believe the proposition is too complicated, you don’t like restricting the use of the funds to mainly health care, or think a one-time tax doesn’t really solve any of our longer-term problems. We landed at no.

Proposition 41: Prohibits New State Taxes That Exclude Revenues from State Spending Limit. Requires Audits for New State Special Taxes

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, courtesy of Google co-founder Sergey Brin, who provided $100 million to support Propositions 41 and 42, and to oppose Proposition 40. Additional significant support from venture capitalist John Doerr ($30 million), and Patrick Collison (co-founder of Stripe, $22 million), among others.

Summary

• Prohibits any new state taxes that exclude their revenues from the state spending limit approved by voters in 1979.

• For statewide special taxes, requires (1) a preelection audit of programs that would receive funding from a voter-proposed special tax, and (2) recurring audits of programs funded by special taxes enacted after January 1, 2026.

• States that other voter-approved measures appearing on the same ballot are void if they conflict with this measure and this measure receives more affirmative votes.

Our Analysis

Both Proposition 41, and its sibling Proposition 42, were devised by Sergey Brin and other billionaires as counterattacks to Proposition 40. Both contain provisions that would nullify Proposition 40 if either pass and at least one of them gets more votes than Proposition 40.

Proposition 41 is a constitutional amendment that prohibits any new state tax that is enacted or takes effect on or after January 1, 2026 from being exempted from the state spending limit, also known as the Gann limit (discussed in more detail in our write up of Proposition 2). This is targeting the Proposition 40 billionaire tax, which excludes the proceeds of that tax from the Gann limit. There is a provision that explicitly specifies that if Proposition 41 gets more votes than Proposition 40, all of the provisions of Proposition 40 are null and void. It isn’t clear if there will be other future effects of this prohibition on new taxes being exempt from the Gann limit. The Legislature already is prohibited from passing a tax that is excluded from the Gann limit, because the Gann limit is in the Constitution and would require a vote of the people. If there is a future initiative to impose a tax and exempt the proceeds from the Gann limit, it would have to be a constitutional amendment anyway, and so presumably could repeal or make an exception to the prohibition established by Proposition 41.

The other thing Proposition 41 does, probably trying to make it more appealing to voters, is to require any special tax (a tax that is earmarked for a specific purpose) proposed by a citizens’ initiative, to have a pre-election financial and performance audit of each program that would receive moneys from the special tax, prepared by the office of the California State Auditor. Sounds appealing, right? The language goes on to list specific matters the audit is required to address, including whether the program is “maximizing its output for every dollar spent,” the amount of actual and potential fraud, waste, and abuse in the program, and recommendations on how the program could achieve a budgetary savings of at least 10% annually, among other specific tasks. The cost of the audit is required to be reimbursed from the proceeds of the special tax if the initiative is approved by voters, but since the audit is required to commence even before the proposed initiative has achieved the necessary signatures to qualify for the ballot, the cost of most of these audits will have to be absorbed from the General Fund.

In addition to the pre-election audit of proposed initiatives seeking to impose a special tax, Proposition 41 requires ongoing audits of all special taxes enacted on or after January 1, 2026, regardless of whether they were enacted by the Legislature or by a statewide initiative measure. The audits would be required every four years, and the costs would be borne by the special tax. The financial and performance audit would have to report on the same list of matters specified in the pre-election audit of initiatives.

It’s hard to argue against financial and performance audits, even if we think the list of specific directives that the audit is required to address seem designed to put a thumb on the scale by making it look like it is funding a wasteful program, making it harder to pass the initiative. But this is really about trying to nullify Proposition 40.

In the end, how you vote on Proposition 41 will likely depend on how you decide to vote on Proposition 40, the Billionaire Tax. If you vote yes on Proposition 40, you should definitely vote no on Proposition 41 and Proposition 42 (discussed next).  On the other hand, if you strongly oppose Proposition 40, you probably will want to vote yes on this initiative. If you don’t end up supporting Proposition 40 but don’t feel strongly about it and would be okay if it becomes law anyway, you can feel free to vote no on Proposition 41 as well. We find ourselves in the latter camp, and are voting no on both.

Proposition 42: Prohibits New State Personal Property Taxes and Certain Retroactive State Taxes

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, courtesy of Google co-founder Sergey Brin, who provided $100 million to support Propositions 41 and 42, and to oppose Proposition 40. Additional significant support from venture capitalist John Doerr ($30 million), and Patrick Collison (co-founder of Stripe, $22 million), among others.

Summary

• Prohibits new state taxes on personal property, including business interests, intellectual property, and financial assets (including assets in retirement and investment accounts).

• Prohibits new state taxes that apply retroactively based on the taxpayer’s conduct, activities, or a status that occurred before the new tax’s effective date.

• Applies to new taxes that are enacted or take effect on or after January 1, 2026.

• States that other voter-approved measures appearing on the same ballot are void if they conflict with this measure and this measure receives more affirmative votes.

Our Analysis

Proposition 42 is also primarily intended to nullify Proposition 40. Instead of using the Gann limit as the hook, Proposition 42 prohibits any taxes imposed on or after January 1, 2026 on the ownership of financial assets, retirement accounts, interests in businesses, and personal property. Additionally, it prohibits “retroactive taxes” imposed on or after January 1, 2026, defined to include any tax that will result in “tax liability based on conduct, activities, or a status that occurred or was present prior to the effective date of the state law or constitutional provision.” Proposition 42 contains the same language that makes all provisions of Proposition 40 null and void and this initiative gets more votes. Proponents have emphasized that this initiative is protecting people from having their retirement accounts taxed. We find this rather dishonest – no one is contemplating taxing anyone’s retirement account, with one exception that I’m pretty sure doesn’t apply to anyone reading this: the proposed Billionaire Tax Act, while excluding pensions, 401ks, traditional IRAs, and most Roth IRAs from the wealth tax, does include Roth IRAs if the cumulative value of the Roth IRA accounts are $10 million or more. We should be so lucky.

Proposition 42 would have a much more significant impact on the capacity of the Legislature to enact tax policy. While California does not generally tax the ownership of financial assets, as we discussed with Proposition 40, the super rich are increasingly able to avoid other forms of taxation, protecting and vastly growing their wealth and leading to an unhealthy concentration of wealth and power in the hands of the few. Constitutionally prohibiting the Legislature from exploring different ways of taxing the super wealthy, seems like a bad idea. Proposition 42 prohibits the Legislature from passing even the mildest version of a wealth tax, and would instead require a constitutional amendment.

Similar to Proposition 41, how you vote on Proposition 42 will again depend on how you decide to vote on Proposition 40, the Billionaire Tax. If you vote yes on Proposition 40, you should definitely vote no on both Proposition 41 and Proposition 42.  On the other hand, if you strongly oppose Proposition 40, you should vote yes on this initiative. If you don’t end up supporting Proposition 40 but don’t feel strongly about it and would be okay if it becomes law anyway, you can feel free to vote no on Proposition 42 as well. We are voting no.

Proposition 43: Limits Voters’ Ability to Raise Revenues for Local Government Services

Marchand Recommendation: YES

Who put it on the ballot: The Legislature

Summary

• Currently, local governments must obtain two-thirds approval to impose, extend, or increase special taxes (taxes dedicated to a specific purpose) that they place on the ballot. However, this two-thirds vote requirement does not currently apply to special taxes put on the ballot by voter signature gathering.

• This measure would limit voters’ ability to pass voter-proposed local special taxes by raising the percentage of votes needed to approve such ballot measures from a majority (over 50%) to two-thirds.

Our Analysis

At least this proposition is only three paragraphs! It’s so short it’s worth copying here:

Sec 4.5 (a). Beginning on January 1, 2027, and notwithstanding Article II and Article XI, no local government, including the electorate of a local government exercising its initiative power, may impose, extend, or increase any special tax, except as provided in Section 4 of this article, subdivision (d) of Section 2 and Article XIIIC, and paragraph (2) of subdivision (a) of Section 3 of Article XIIID, unless and until that tax is submitted to the electorate and approved by a two-thirds vote.

(b) Notwithstanding Article II and Article XI, no local government, including the electorate of a local government exercising the initiative power, may impose ad valorem taxes on real property, except as provided in paragraph (1) of subdivision (a) of Section 3 of Article XIIID.

(c) “Local government” and “special tax” shall have the same meaning as provided in Section 1 of Article XIIIC.

If you think this is complicated, wait until you get to Proposition 45 (Expedited CEQA Process). Proposition 43 removes the ability of voters to place an initiative on a local ballot that only requires a majority vote to pass, as well as removes the ability of a voter initiative to impose a tax based on property value (ad valorem). The proposition essentially places the same limits on voter initiatives that already exist on special taxes proposed by local governments. (Note that general taxes proposed by local governments still require only a majority vote.) The ability for a voter initiative to raise special taxes with only a majority vote was “discovered” relatively recently through court decisions, and has since led to dozens of local voter initiatives placed on the ballot with a majority vote threshold instead of a 2/3 vote threshold. These special taxes have been proposed for everything from childcare to parks and recreation to affordable housing – some have passed and some have failed.

But I’ll back up a step. Voters passed Proposition 13 in 1978, which did a lot of things – one of which was to require local government special taxes to secure 2/3 approval to pass. In 1982, a lawsuit refined the definition of special tax to mean a “specific purpose.” Skip forward to 2017 and another lawsuit surprised municipal finance experts with a decision that the 2/3 vote threshold did not apply to voter-initiated ballot measures. (Yes, that’s right. Until 2017, voters assumed voter-initiated special taxes required a 2/3 vote to pass.) Yet another lawsuit in 2020 clarified the tax approval rules of Proposition 13, Proposition 62, and Proposition 218 do not apply to voter-initiated ballot measures. Hence the flurry of voter initiatives mentioned above.

In response to the court rulings, the Howard Jarvis Taxpayers Association qualified an initiative for the 2026 ballot that would have required 2/3 voter approval for all special taxes and eliminated property transfer taxes. The California State Legislature made a deal with the Howard Jarvis Taxpayers Association; the Association agreed to withdraw its initiative in favor of Proposition 43, which extends the 2/3 approval threshold for special taxes to voter initiatives but does not eliminate property transfer taxes. The California State Legislature waived all its normal rules and passed ACA 22 (which became Proposition 43) in a single day.

How you vote on this proposition comes down to two things: 1) your willingness to accept new taxes; and 2) whether you think there should be a different standard for voter initiatives as opposed to tax measures placed on the ballot by a local government.

We can see both sides of this proposition, as we can with most propositions. We have seen a local government, faced with hard decisions caused by increasing costs associated with public employee pensions, ask voters for a general tax increase that only requires a majority vote. This local government told the voters the funds were primarily for roads and other civic improvements, then turned around and provided public employees with a raise. This experience makes MAPA skeptical of majority-vote taxes generally. On the other hand, we have seen local governments raise tax revenue for important public purposes with widespread benefit, like libraries and parks.

If you think voters should be subject to the same rules for special taxes as their city councils and county supervisors, vote yes. If you think all special taxes should have a 2/3 threshold for voter approval, vote yes. If you think a simple majority threshold is sufficient for voter initiatives to pass special taxes, vote no. We struggled with this one because we’ve seen many good local special taxes and some pretty bad ones; we like governments having to convince a supermajority of its citizens that the tax will fund an important need. In the end, we could not get past that this was a loophole created by the courts, which went against the previous universal understanding that special taxes needed a 2/3 vote. Period. We also think there should be consistency: if local governments are subject to a 2/3 vote, they shouldn’t be able to get around that by drafting a special tax, then getting a voter group to put it on the ballot. We will be voting yes.

Proposition 44: Requires Community Health Clinics to Spend 90% of Revenue on Program Services

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ Initiative, funded primarily by SEIU-United Healthcare Workers

Summary

• Imposes penalties on nonprofit Federally Qualified Health Centers (community clinics providing primary care to medically underserved areas and populations) that spend less than 90% of revenue on “program services” advancing their charitable purpose, including but not limited to patient services. Department of Public Health may waive spending requirements in exceptional circumstances.

• Authorizes Attorney General to publish guidance defining qualifying expenditures.

• Monetary penalties may be refunded if centers become compliant within five years.

• Authorizes criminal charges for false reports or artificially increasing spending ratio.

Our Analysis

Remember all those dialysis initiatives you were asked to vote on in 2018, 2020, and 2022? Those were all brought to you by SEIU-UHW as part of a long-running campaign to organize hemodialysis technicians. Their strategy is to force the industry they are working against to play defense and come to the table, among other things. For the past couple of years, SEIU-UHW has turned their attention to community clinics. This proposition is similar to a bill they tried to pass in the Legislature in 2025, AB 1113, which didn’t even make it out of the Assembly. According to the clinics, SEIU offered to withdraw this proposition in exchange for more union membership or for the clinics to support the Proposition 40 wealth tax that SEIU-UHW is also sponsoring (SEIU-UHW denies this).

The concept of trying to require certain clinics to spend at least 90% of their revenue on patient health care services is similar to something called the “medical loss ratio” in health insurance. The federal Affordable Care Act requires health insurers to spend at least 80% or 85% (depending on which market) on medical care rather than on administration, marketing, executive compensation, or other overhead costs. However, it is relatively straightforward to determine how much of the premium dollars collected by a health insurance company are in turn spent on doctors, hospitals, and drug costs. Trying to determine whether certain dollars spent by a health care provider are going toward “activities that accomplish each clinic’s exempt purpose” is more complicated. This initiative attempts to determine this number by using the “total program service expenses” as reported on the clinic’s IRS Form 990, which can then be adjusted by the Attorney General who is authorized to provide guidance to further define what is considered program service expenses. The proposition targets what are known as Federally Qualified Health Centers, which means the clinics must meet certain requirements, including providing services to an underserved population, and providing comprehensive services to patients without regard to their ability to pay.  By definition, FQHCs are nonprofit organizations governed by a community-based board of directors. 

According to the Legislative Analyst’s Office, most of these clinics spend 80% of their revenue on providing health care services based on their IRS 990 reports, though the percent varies. SEIU-UHW claims some clinics are spending as low as 60% or 70% on program services. Proposition 44 imposes penalties for failure to meet the 90% spend requirement equal to the difference between the amount the clinic spent on allowed expenses and 90% of the clinic’s total revenue. In other words, if a clinic only spent 80% of their revenue on allowed expenses, then the penalty would be 10% of their revenue. Pretty steep penalty, though there is language allowing clinics to apply for waivers or an alternative spending ratio based on unexpected or exceptional circumstances or the clinic’s economic condition.The California Primary Care Association, which is the organization representing community clinics, says this measure is an “existential threat” to clinics, and would lead to closures of safety net providers across the state. Proposition 44 does not list anyone in support beside SEIU-UHW, and is opposed by, well, just about everybody. The California Medical Association, California Hospital Association, Planned Parenthood, the California Teachers Association, and the League of Women Voters, among others. Even the California Democratic Party and the California Chamber of Commerce are on the same side in opposing this proposition. 

Are some FQHCs, which enjoy an enhanced payment model to compensate for seeing low-income patients and providing services regardless of ability to pay, spending a little too lavishly on executive compensation, or building fancy new buildings? Maybe. But we do not want to reward a serial abuser of the initiative process or risk our safety net providers on a complicated initiative that defers key implementation details to the Attorney General’s office. We are voting no.

Proposition 45: Modifies Environmental Review for Certain Projects

Marchand Recommendation: NO

Who put it on the ballot: Citizens’ initiative, sponsored by the California Chamber of Commerce

Summary

• Amends California Environmental Quality Act (CEQA) to expedite environmental review for specified project categories (including most housing, transportation, water, health, wildfire mitigation, education facility, internet access, and clean energy projects). For these types of projects, this measure:

• Sets deadlines for public agencies to complete environmental review and take required actions.

• Allows expedited review of environmental impacts, limiting public agencies’ current obligation to consider a range of feasible project alternatives to reduce environmental impacts.

• Establishes deadlines for filing and resolving lawsuits challenging project approvals; limits evidence courts may consider and relief courts can order.

Our Analysis

Woo-wee, this one is a doozie. Almost 17 pages of dense text in your Official Voter Information Guide. Should any voter have to read and understand 17 pages of California Environmental Quality Act law changes? And to make matters worse, the California Chamber of Commerce placed this “citizens’ initiative” on the ballot, so the 17 pages of dense language were not vetted through the State legislative process. Talk about making the voter’s responsibility difficult. We’re not even sure MAPA can help untangle this one.

But here we go. Remember how we discussed a renewed interest in the Legislature on reducing costs of building affordable housing as part of our analysis of Proposition 1 (Affordable Housing Bond)? And how the Legislature exempted some infill projects from the California Environmental Quality Act in 2025? Well, Proposition 45 is capitalizing on this renewed enthusiasm not only to address the housing shortage but to speed up a wide variety of projects by expediting them through the California Environmental Quality Act process. While there are some good proposals in this proposition, there are also some potentially significant unknowns. So many unknowns that even the pro-housing group California Yes In My Backyard (YIMBY) does not have a position on this proposition. California YIMBY writes:

“Still, our friends in the environmental movement have raised significant substantive concerns about this measure. Most relevant to housing voters: we should not be building new homes in the fire-prone wildland urban interface because doing so puts people in harm’s way and exacerbates our insurance crisis. The fact that Prop 45 makes it easier to build freeways but not high speed rail also gives us pause.”

The conservative Hoover Institution, in their Proposition 45 explainer, identifies risks associated with this measure, such as:

• A one-alternative EIR and a “deemed complete” default can end review before the analysis is finished, so real environmental or community harms may go unstudied;

• The bar on rescinding an approval and on challenging later construction approvals sharply limits the public’s ability to stop an under-reviewed project; and,

• The “essential project” definitions are broad and include ancillary infrastructure, so fights over what qualifies will be frequent and consequential.

On the other hand, as pointed out in the MAPA analysis of Proposition 1, California has a long way to go to build the affordable housing and other infrastructure needed to sustain our existing and growing population. CEQA has long been cited as adding years and millions of dollars to the project development process. With Democrats holding large majorities in the State Legislature and close ties to environmental groups, there was little political incentive to work with business and other pro-housing interests to reopen CEQA. In MAPA’s experience, people working to advance housing and public projects never felt it was even possible to question the CEQA process, much less change it. Heck, Petrea worked on a countywide Habitat Conservation Plan/Natural Community Plan that required almost $400,000 and two years to complete a full Environmental Impact Report under CEQA. For a plan. And nothing was changed as a result of the EIR! Proposition 45 will probably not apply to projects like a habitat conservation plan but illustrates the issue. The renewed interest in expediting projects has opened the California Environmental Quality Act to scrutiny in ways that we never thought possible.

We agree that CEQA has been abused and would like to see a more comprehensive reform rather continuing to just exempt certain types of projects. Still, we do not think this proposal is baked. There are too many unknowns, unclear definitions, and lingering questions. If you think the problems with CEQA justify the risk that this goes too far and makes it more likely that poorly reviewed projects will be built, and can accept limits on your ability as a citizen or an organization to influence projects, vote yes. If not, vote no. Given the Legislature is already tackling some of these tough issues (see the exemption for some infill projects from CEQA), we are optimistic the Legislature will continue this work. Let them try. We are voting no.