SACRAMENTO, Calif. — Gabe Bankman-Fried, a former Wall Street trader, has raised $12 million from a cryptocurrency trading firm founded by his brother, Sam Bankman-Fried. Dustin Moskovitz, a billionaire who roomed with Mark Zuckerberg in college and helped found Facebook in 2004, funds a nonprofit with his wife that has ponied up $6.5 million.
And Max Henderson, a startup investor and former Google executive, is using that money to spearhead a campaign for a statewide ballot initiative that would tax California’s wealthiest residents and fund public health initiatives, with the ambitious goal of preventing another pandemic from ripping across the country.
These entrepreneurs have applied their tech and data expertise to covid-related philanthropic ventures. They say government must dramatically increase its investments in the crumbling public health system considering how unprepared California and the U.S. were for the covid-19 crisis.
The proposed tax would generate as much as $15 billion over 10 years, according to a state government analysis of the measure, which organizers say is close to qualifying for the November ballot.
“We’ve spent trillions of dollars responding to covid, but we’ve done very little to prevent the next pandemic,” Gabe Bankman-Fried said.
Californians this year will decide on a slew of health care-related initiatives and tax proposals. Voter support for raising taxes appears tepid, however. Californians in 2020 rejected a measure that sought to raise some commercial property taxes, and taxpayer advocates argue that opposition to higher taxes has intensified as gas, housing, and other costs have risen.
The public health initiative, called the “California Pandemic Early Detection and Prevention Act,” would impose an additional tax “at the rate of 0.75 percent on that portion of a taxpayer’s taxable income” that exceeds $5 million. The tax would last for 10 years, through 2032, and generate $500 million to $1.5 billion annually, according to an analysis by the nonpartisan Legislative Analyst’s Office.
The campaign had raised nearly $19 million as of early April, according to organizers and state records. Organizers expect the measure to qualify for the November ballot because the campaign has gathered nearly all of the 1 million signatures required. The signatures must be validated by the California secretary of state.
If the measure passes, half the proceeds would fund an institute to detect and prevent new disease outbreaks, 25% would pay for safety upgrades at schools, and 25% would help rebuild local public health workforces and infrastructure.
“We’re lucky to have cutting-edge technology here to make sure we never see these economic and school shutdowns ever again,” Henderson said. “Our vision is to put the systems in place to prevent the next pandemic. It’s not going to happen at the federal level, but California can lead.”
Critics argue that Californians are already overtaxed. And the public health initiative likely won’t be the only proposal on the November ballot that would increase taxes on high-income earners. Another measure, which appears likely to make the ballot, would raise the personal income taxes of residents who earn more than $2 million a year to fund electric vehicles and wildfire suppression efforts.
A University of California-Berkeley Institute of Governmental Studies poll released April 15 found that 64% of California voters feel that the state and federal taxes “they and their family have to pay are too high,” a 10 percentage point increase over six years ago.
“Why are we even talking about raising taxes when we have a nearly $50 billion state budget surplus,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “This is exactly why we’re seeing significant flight out of California and why wealthier individuals like Elon Musk are leaving for states like Texas and Florida.”
As coronavirus cases have declined statewide and nationally, the economy has emerged as a major priority among Californians.
According to a March survey by the Public Policy Institute of California, 35% of state residents said recent price increases had “caused serious financial hardship.” And many expressed concern over rising housing costs and homelessness. At the same time, nearly 80% of Californians were optimistic that the worst of the coronavirus pandemic was “behind us,” the poll found.
Patrick Kallerman, vice president of research for the Bay Area Council, which represents business interests, argued that higher taxes could drive high-income people out of California and cut into the state’s tax base. “These record budget surpluses California is seeing are coming from the same higher-income folks who would see bigger taxes, so we need to think long and hard about how to keep California’s golden goose,” Kallerman said. He noted that the Bay Area Council has not taken a position on the public health initiative.
But campaign organizers and supporters say the investments would make California more attractive to businesses and prospective residents.
“California will be a global leader in this new area of technology and will serve as a model for the nation and the world while creating thousands of new, well-paid jobs, generating millions of dollars in new tax revenues, and drawing talent and private investment into the state,” the initiative language states.
The organization that the measure would create — the California Institute for Pandemic Prevention — would distribute public health grants to researchers, institutions, and scientists studying ways to reduce the transmission of dangerous pathogens. That could include investing in genomic sequencing — the science behind tracing viruses that helped California researchers be the first to identify a case of the omicron variant in the U.S.
The California Department of Public Health and the state’s 61 local public-health agencies would also receive new tax revenue to hire more epidemiologists, nurses, and other public health professionals to replace the ones who have resigned en masse during the covid pandemic. The revenue could also fund vaccination campaigns and contact tracing, data-sharing systems, and public health laboratories — 11 of which have closed in California since 1999.
K-12 schools could use the funding to install air filtration and ventilation systems, ultraviolet disinfecting equipment, touchless bathroom fixtures, and other technology.
Gov. Gavin Newsom’s office declined to say whether he supports the initiative. After declining to boost public health budgets in the first year of the pandemic, Newsom, a Democrat, last year proposed $300 million in new state funding annually for state and local public health departments. It was approved and begins in the coming fiscal year, which starts July 1.
The backers of the public health initiative have launched other pandemic-related efforts aimed at helping government better respond to covid.
Gabe Bankman-Fried in 2020 founded Guarding Against Pandemics, which advocates at the state and federal levels for greater public health investment. Early in the pandemic, Henderson helped launch Covid Act Now to distribute data on coronavirus infections, hospitalizations, and deaths to federal, state, and local public-health agencies.
If the initiative passes, it would provide the largest infusion of money for the state’s public health system since it was created. Researchers and public health experts say that’s critical because deadlier pandemic threats are on the horizon.
“Is our public health system broken? Yes, absolutely. Are these pandemic threats real? More than people even understand,” said Dr. Stephen Luby, a Stanford University professor of medicine and infectious diseases. “We are so globally connected now. This pandemic is a warning shot.”
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
Source : Kaiser Health News