A Union Feud Shouldn’t Sink California’s Billionaire Tax
Part of California’s labor movement wants to tax billionaires to save health care for 15 million Californians. Another part, close to Gov. Gavin Newsom, doesn’t — and is promoting suspiciously timed charges of abuse about a pro-tax union leader.
Sen. Bernie Sanders speaks during the campaign kickoff for the California Billionaire Tax Act at The Wiltern in Los Angeles, on February 18, 2026. (Patrick T. Fallon / AFP via Getty Images)
America’s already threadbare welfare state is on the brink of total collapse. Over the next ten years, national funding for Medicaid, whose benefits 81 million Americans rely upon, will be cut by about $1 trillion. States that expanded Medicaid access under the Affordable Care Act will be hit especially hard. More immediately, in just a few days, on October 1, and again on January 1, various new requirements for Medicaid eligibility will be instituted. This means that receiving and maintaining insurance will suddenly become much more difficult for millions of Americans.
The result of all of these changes, enacted by H. R. 1, or the One Big Beautiful Bill Act, will be to throw states across the country into health and budget crises as their Medicaid funding falls off a cliff, with some of the worst effects of the bill conveniently placed after the midterm elections. There is one state, however, that could avoid that fate, should Proposition 40, or the California Billionaire Tax, pass this November.
The Big Beautiful Bill blasted open a $30 billion hole in annual Medicaid coverage for Californians, a program the state calls Medi-Cal. Prop 40 proposes to backfill much of that loss with a onetime 5 percent tax on billionaire wealth raising an estimated $100 billion, most of it earmarked for health care. It’s a percentage so small that, given the current speed at which their wealth is accumulating, most billionaires in California would earn back the total amount of money lost in a matter of months. While much of the discourse around Prop 40 has understandably been devoted to what it means to tax the billionaires, it is saving Medi-Cal — and not some vague notion of “punishing the rich” — that is the central purpose of the initiative.
However, rather than support this pragmatic solution to a looming crisis, Service Employees International Union (SEIU) California has officially remained neutral on the initiative, which was put forth by one of their own member unions, SEIU United Healthcare Workers West (SEIU-UHW). Now investigations commissioned by SEIU California and the international union allege that SEIU-UHW’s president, Dave Regan, the man widely acknowledged as the architect of the tax, has attempted to “extort” support for Prop 40 from them, according to the inflammatory headline in the Los Angeles Times, a newspaper owned by billionaire Patrick Soon-Shiong.
Coming less than two months before the election in November, the allegations against Regan bear all the hallmarks of a politically timed campaign — an attempt to chip away at Prop 40’s popularity. Now SEIU will have to decide which path to take: save health care coverage for nearly fifteen million Californians, or surrender to the billionaires.
The key allegations against Regan are that he attempted to “extort” support for Prop 40 from SEIU California by threatening to investigate governance issues at the state council, and that this action was part of a pattern of “bullying,” directed at women in particular. At issue are Regan’s interactions with SEIU California’s then president, David Huerta, and its executive director, Tia Orr, who claims Regan attempted to “intimidate” her into supporting Prop 40. The most serious allegation is that Regan assaulted one of Orr’s predecessors, Courtni Pugh, in 2009. According to Pugh, Regan kicked open her office door, cornering her against the wall, and pressed his fingers to her chest, swearing at her. “I told my colleagues and organization leaders when it occurred,” Pugh said in a statement. “I was asked to participate in the later investigation because so many people had heard about the 2009 incident over the years.”
Regan, in turn, claims that both are “complete fabrications.”
Regan and SEIU-UHW’s conflicts with SEIU California are long-standing. According to SEIU-UHW, in 2019 when SEIU California allegedly attempted to broker a deal with Uber that would have traded away rideshare drivers’ labor rights for a weak form of sectoral bargaining, Regan and SEIU-UHW threatened to publicly oppose the proposal. The governance challenge goes back to the 2021 resignation of Orr’s predecessor, Alma Hernandez, who stepped down after being charged with fraud, later pleading guilty to felony counts of embezzlement and tax fraud. Regan admits to having concerns over the “shortcomings in the state council’s governance structure in the wake of [this] corruption scandal” but denies having threatened any action over these concerns.
Since Prop 40’s conception, Governor Gavin Newsom — no doubt with his eyes on the White House — has vowed to defeat the measure. Should it pass, it would be a major blow to his presidential ambitions. In July, SEIU California leaders surrounded Newsom as he signed the Fair Share from Big Corporations Act, which claimed to “ensure corporations pay their fair share, protecting vital services for Californians.” What the bill actually does is punt the measure to next year, when a new governor takes office. By touting this delay tactic as a win and in remaining neutral on Prop 40, SEIU California has proven itself even more loyal to the Democratic Party machine than the California Democratic Party, which in fact bucked Newsom and endorsed the Billionaire Tax.
Orr, who counts many friends in the governor’s office, has worked with Newsom on a string of labor-related bills that, while hailed as “historic” and “landmark” victories, involved major concessions to employers: dropping the joint-liability provision from the bill that established California’s Fast Food Council and trading sectoral bargaining for rideshare drivers for lower minimum insurance requirements for Uber and Lyft.
Pugh’s allegations of physical intimidation revolve around events not from a few months ago but from seventeen years prior. And while the Los Angeles Times noted that Pugh, now a political consultant, has worked against Prop 40, it failed to mention that she is a longtime member of Newsom’s inner campaign circle, having worked as his political director fighting the 2021 recall effort. In November 2024, Newsom appointed Pugh to the Exposition Park and California Science Center Board of Directors. Currently, Pugh is also a partner at Hilltop Public Solutions, a consulting firm working against Prop 40.
SEIU California filed formal charges with the international union in February; the investigations found several of the accusations against Regan to be credible. SEIU-UHW, in turn, claims that this internal report was leaked to the LA Times by SEIU California attorney Glenn Rothner (whose resignation Regan has long called for), and that it has its own charges filed against SEIU California working their way through the international union. This is a clear case of an internal union spat, which — without Prop 40 at stake — would have found no reason to surface in the pages of a billionaire-owned newspaper less than two months before voters decide on the Billionaire Tax.
The “Extreme Center” and Their Attacks on the Rising Left Are a Growing Problem
To be clear: the accusations against Regan are serious and demand serious inquiry. But the context in which they have been made renders them entirely unserious. Intimidation and harassment in progressive circles, and particularly in unions, is a real problem that must be stamped out. What is so frustrating about this politicized use of such allegations, turning justified revulsion against such behavior into a campaign smear, is that it makes real offenders much harder to punish. People see examples of accusations like these surfacing at such times and conclude that it’s all election-season theater. It’s not — or, at least, it shouldn’t be — but the release of these findings weeks before an extremely contentious election will certainly muddy the waters. This is all the more shameful given that it has been deployed to sink the one initiative standing in the way of the dismantling of Medicaid in California.
Many progressives and unionists have condemned Regan and SEIU-UHW, without first questioning who is making these accusations, when, and for what purpose. That includes the California Nurses Association, a Prop 40 supporter that has called on Regan to resign.
But others in the labor movement have been more careful. Lorena Gonzalez, president of the California Labor Federation, which has endorsed Prop 40, pointed out to the Los Angeles Times that the members of Regan’s union, overwhelmingly women and women of color, just reelected him. “Ultimately they have the ability to make this determination of whether he’s an appropriate leader, which they just made again,” she said. “What’s most important is that we have to keep our eyes on the fact that Medi-Cal is being cut and we have no solution but the billionaire’s tax to fill that cut.” By all means, after this election season, this internal SEIU squabble ought to be sorted through. But if you’re making a big show of this now, and you are also not doing everything in your power to see that Prop 40 passes with flying colors this November — ensuring that nearly 15 million Californians keep their healthcare coverage — it simply means that you are carrying water for the billionaires.
With the rise of left-wing politics in America, the political writer Tariq Ali has warned of the machinations of the “extreme center” and how centrist Democrat types have grown much more radical in their methods with the increasing polarization between left-wing social democracy and right-wing authoritarianism. The Left should be on guard against such methods, which will only grow more insidious and grotesque as the center’s base evaporates. It will do everything it can to cling to power, including smear campaigns that rely upon identity-based oppression, and a Left worthy of the name will be able to distinguish between a legitimate misdeed and partisan mudslinging.
In this particular case, the political question could not be more urgent. As a therapist who has worked for many years with low-income patients, many of them already struggling to navigate byzantine Medicaid requirements, I am bracing for the mental health crisis that the H. R. 1 cuts will have in my home state of New York. As bad as the mental health crisis is now, even more horrors are on the horizon: already overbooked clinics will soon be barring their doors, which means countless patients will soon end up on the streets, untreated and unmedicated. Already overburdened emergency rooms will be overrun. The state will be in fiscal crisis. All so that the ultrarich get to pay even less in taxes than they already do.
“Tax the Rich” Campaigns Aren’t Just About Expanding Our Threadbare Welfare State but Also Holding On to What We Have
Having worked on New York City Democratic Socialists of America’s Tax the Rich campaign now for several legislative cycles, I know how long and difficult the fight for progressive taxation is. While much recent media attention has gone to political candidates on the Left, the possibility of taxing the rich in California to fund Medi-Cal might be the most important political opening in this upcoming midterm election. I do not know Dave Regan personally. What I do know is that nothing I could learn about Dave Regan right now — particularly about an interaction he had with someone almost two decades ago — could change my mind about the political and moral necessity of passing the Billionaire Tax in order to save Medi-Cal and keep health care coverage for nearly fifteen million Californians. I only wish we had a similar option in New York.
The squabble between SEIU California and Regan now goes up the chain to SEIU President April Verrett. Verrett could suspend Regan while the charges are heard, confirming a common perception of SEIU as a union in the Democratic Party’s back pocket, one already looking to score points with a possible Newsom presidential administration. At this particular moment, when Californians should be focused on saving Medi-Cal from collapse, this would amount to a declaration of unquestioned, unthinking loyalty to the extreme center.
But Verrett could also defer this mess, help push Prop 40 over the finish line, and thereby signal that SEIU is ready to be a voice for the working class rather than follow dutifully behind billionaire-backed political candidates.
Nothing less than the healthcare of fifteen million Californians — and soon, tens of millions of Americans — hangs in the balance.