California Democratic Party delegates delivered a stunning rebuke to Governor Gavin Newsom and gubernatorial nominee Xavier Becerra by endorsing a controversial wealth tax that both leaders publicly oppose, exposing deep fractures within the state’s Democratic establishment ahead of November’s election.

Party Breaks With Top Leaders

At the California Democratic Party convention in San Diego on Sunday, delegates voted to endorse Proposition 40, a ballot measure imposing a one-time 5% tax on approximately 200 California billionaires. The endorsement came after contentious floor debates and required multiple votes before clearing the party’s 60% threshold. An initial vote fell short at 59.2% support, prompting delegates to reject a no-position proposal before reconsidering. The second attempt passed 145-90, achieving 61.7% support.

The SEIU-United Healthcare Workers West union and its leader Dave Regan spearheaded the campaign for the measure. California Democratic Party Chair Rusty Hicks defended the endorsement, stating that every party endorsement is earned through a deliberative process that prioritizes member values and ensures meaningful participation in shaping the state’s future.

Newsom and Becerra Stand Firm in Opposition

Governor Newsom has consistently rejected California-only wealth taxes, arguing they create economic disadvantages by encouraging wealthy residents to relocate to lower-tax states. The outgoing governor maintains that a federal wealth tax would prove more effective by preventing billionaires from avoiding taxation through interstate moves. Becerra reinforced his opposition Friday while announcing positions on multiple statewide ballot measures, instead backing Proposition 3, which would permanently extend an existing income tax surcharge on high earners for education funding.

Supporters claim Proposition 40 would generate approximately $100 billion, with most funds designated to offset federal healthcare funding reductions from President Donald Trump’s tax-and-spending legislation. Senator Bernie Sanders, Representative Ro Khanna, Teamsters California, AFSCME California, and California Young Democrats have endorsed the measure.

Deep Divisions Within Democratic Coalition

The endorsement exposed significant splits among organized labor and Democratic activists. Convention debates featured supporters arguing the state requires additional revenue to protect healthcare services, while opponents questioned whether the campaign built sufficient coalition support before qualifying the initiative. Business groups mounted strong opposition, warning the measure could discourage investment and accelerate wealthy California departures.

The party endorsement represents one of the most visible public rifts within California’s Democratic establishment this election cycle, with progressive activists embracing wealth redistribution while establishment leaders including Newsom and Becerra maintain opposition. Supporters celebrated the vote as evidence that Democratic voters support the proposal despite resistance from high-profile elected officials.