California voters have turned down Proposition 40, which would have made the state the first in the nation to tax the net worth of billionaires, after a bitter ballot campaign that drew enormous spending from tech leaders determined to block the tax.

The Associated Press determined Monday that the "no" side had secured enough votes to win. Because most Californians vote by mail and ballots postmarked by Election Day are counted if they arrive within a week, close contests in the state often take days or weeks to resolve.

What the measure would have done

Proposition 40 would have imposed a one-time 5% tax on the wealth of California residents worth more than $1 billion. Most of the revenue was earmarked to offset federal cuts to healthcare funding, with 10% directed to education and food-assistance programs. SEIU United Healthcare Workers West, the union behind the measure, argued the money was needed to make up for an estimated $100 billion in federal healthcare funding the state is expected to lose over five years.

The proposal was the most significant test so far of a long-standing progressive goal: taxing the ultra-rich on their investment holdings, the main source of their wealth, rather than on wages from work.

A lopsided money fight

Opponents outraised supporters by roughly 10 to 1. Building a Better California, a political action committee funded largely by billionaires, raised more than $333 million to defeat the tax and also backed rival ballot measures designed to cancel it out. Google co-founder Sergey Brin alone contributed more than $100 million, close to a third of the committee's total.

The defeat is also a victory for Democratic leaders who opposed the tax, including Gov. Gavin Newsom, a possible 2028 presidential candidate. Critics warned that the measure would have driven ultrawealthy residents out of California.

Supporters plan another attempt

The measure drew backing from progressive figures outside California, including Vermont Sen. Bernie Sanders, who held rallies across the state in the final weeks of the campaign.

The Yes on 40 campaign said its goal was to protect healthcare for Californians and pledged to return with a tax measure in 2028 if patients are not protected. In a statement Monday, proponents said that buying an election is not the same as winning the debate, and called the result only the first round of the fight.