The state elects a Latino governor. At the same time, Californians voted on the new billionaire tax. A co-founder of Google is behind the record-expensive defense campaign.
Xavier Becerra: The Democrat only asserted himself late in the fight for power. Photo: AP Photo/Noah Berger
Xavier Becerra becomes the first Latino governor of California and won the election against Republican Steve Hilton.
According to the current count, the California referendum on the billionaire tax (“Proposition 40”) failed by 38 percent to 62 percent.
Opponents of the billionaire tax, including Google co-founder Sergey Brin and other tech managers, had raised more than $300 million in advance to fight off the tax.
The new governor Becerra has to start with a budget gap because there is a lack of revenue from the billionaire tax and it is not known how he plans to close the financial gap.
San Francisco. Democrat Xavier Becerra has won the race for California governor. The AP news agency declared the son of Mexican immigrants the winner over Republican Steve Hilton on Tuesday evening (local time). Becerra succeeds the popular Democrat Gavin Newsom, who was not allowed to run again after two terms in office and is considered a future presidential candidate.
Former US Secretary of Health Becerra will be the first Latino to lead the most populous state, although he initially had to assert himself as a candidate in his own party. It was only after the San Francisco Chronicle published allegations of abuse against leading Democrat Eric Swalwell in April that the party rallied around Becerra.
In the election campaign, the Democrat then had to compete against the Republican Hilton. The former Fox News presenter worked with the full support of US President Donald Trump and provoked until the end with election spots that were generated with artificial intelligence (AI). But in vain: California has not elected a Republican to high political office in two decades - and not this time either.
But a second decision was made that night, which affects the election winner himself. In addition to the “midterms”, California also voted on “Proposition 40” – a wealth tax for billionaires – as part of a referendum.
Proponents want to achieve greater tax fairness, while critics warn of possible capital flight. The result: The planned billionaire tax, whose revenue the state wanted to use to plug financial holes in public health care, is currently on the verge of being phased out.
The proposal to impose a one-time five percent levy on assets over a billion dollars was far behind with 38 percent to 62 percent of the vote in the evening after the polls closed. There were two counter-initiatives that would undermine the tax even if it caught up. If two initiatives contradict each other, the one with the most yes votes applies in California.
“Proposition 40” targeted around 250 billionaires. Their revenue should replace what the Trump administration is ripping out of the health care budget. Up to two million Californians could lose their Medi-Cal health insurance as a result of the president's budget bill.
The most expensive defensive battle in California's history was formed against the plan to tax billionaires. The opponents threw more than $300 million into the fight, led by Google co-founder Sergey Brin, whose “Building a Better California” committee also financed the two counter-initiatives. According to campaign finance data, Kleiner Perkins Chairman John Doerr, Reddit boss Steve Huffman and Stripe boss Patrick Collison, among others, paid in there.
The irony of the evening: In the rest of the country, the Californian AI industry's hunger for resources was the undoing of the Republicans of all people. In South Carolina and Kansas, for example, protests against data centers helped Democrats win. In their own country, however, the tech billionaires prevailed.
For the Democrats, this is likely to end a dispute that has torn the party apart for a year. The California party organization and the ultra-left Senator Bernie Sanders promoted the tax. Governors Newsom and Becerra rejected it; Newsom even supported one of the counter initiatives funded by Brin.
Rep. Ro Khanna scoffed in Berkeley that Newsom thought the tax was a bad idea “because he needs these billionaire donors to finance his presidential campaign.” This is “the broken establishment of the Democratic Party.”
The dispute over the billionaire tax is relevant for the entire USA, as it extends beyond California. Because the tax was seen as a test run: If it fails in the left-wing, liberal West, the state with the most billionaires, it will probably be of little use as a campaign promise for the entire country. Sanders had sharpened the question: “Do you still have a democracy in this country – or do billionaires rule?”
The evening remains sensitive for the future ex-governor Newsom, whom the US media is already promoting as a presidential candidate for 2028. Even if the tax fails, he will be accused of standing on the side of the billionaires.
It remained unclear that night who would inherit the legendary Democrat Nancy Pelosi in the House of Representatives. The San Francisco duel between State Senator Scott Wiener and Supervisor Connie Chan, for which Pelosi had campaigned, had not yet been decided. But the electoral districts redesigned by popular vote in 2025 are expected to give the Democrats up to five additional seats - California's contribution to the new majority in the House of Representatives.
For Becerra, the job as governor now begins with a hole in his budget. Since everything looks like the proposed billionaire tax will fail, the money that was supposed to offset the Medi-Cal cuts is missing.
During the election campaign, the new governor did not reveal how he planned to solve the problem. He will take up his new position in January.
