Election 2026 · State of California

Proposition 41: Audits for new state special taxes; spending limit rule

Published September 29, 2026 · Updated October 2, 2026

Proposition 41 would bar new state taxes whose revenue is excluded from the state spending limit, and would cancel such taxes enacted after January 1, 2026. It would also require the State Auditor to review programs that a voter-proposed statewide special tax would fund, before the measure reaches the ballot, and to audit programs funded by new or increased state special taxes every four years. If it gets more yes votes than Proposition 40, the billionaire tax, Proposition 40 could be stopped even if a majority approves it.

Summary by CityHallPass, not the official text or legal advice. The official text controls: California Official Voter Information Guide: Proposition 41.

What would Proposition 41 cost?

The Legislative Analyst says the net effect is unknown. Audit costs would likely be in the low millions of dollars a year and grow over time, mostly paid from the new tax revenue. Printing audit summaries in the state voter guide could add a few hundred thousand dollars per qualified initiative. Savings are possible if audit recommendations are carried out.

What it means for the City of LA

Proposition 41 applies to state taxes and statewide initiatives. It does not change taxes the City of Los Angeles or LA County can levy, and it does not touch the City's Measure FD. Its largest effect on this ballot is on Proposition 40: if 41 gets more yes votes, the one-time billionaire tax for health care could be stopped, the Legislative Analyst says. The analysis does not estimate what either outcome would mean for Los Angeles.

The details

The question on your ballot

Nullifies state taxes enacted after January 1, 2026 that exempt their revenues from voter-approved state spending limit. Requires pre-election and recurring audits of programs funded by new special taxes. Fiscal Impact: The net fiscal effect is unknown as it depends on future decisions by voters, the Legislature, and other policymakers. Supporters: CA Society of Certified Public Accountants (CalCPAs); CalAsian Chamber of Commerce; California Taxpayers Association (CalTax) Opponents: US Senator Bernie Sanders; SEIU United Healthcare Workers West

What would change

The measure adds a new Article XXIV, “Protecting Taxpayer Dollars,” to the State Constitution. A tax is excluded from the spending limit, under the text, if its revenue goes into a fund whose spending is not counted under the limit, or if a statute raises the state’s limit to make room for it (text, Art. XXIV, Sec. 4). The Legislative Analyst puts the audit costs “in the range of the low millions of dollars per year,” growing over time, and says printing audit summaries could add “a few hundred thousand dollars per qualified initiative” (Legislative Analyst).

How it interacts with Proposition 40

Proposition 40, the one-time 5% tax on billionaires, exempts its revenue from the state spending limit (official title and summary, Proposition 40). Proposition 41 would bar collecting any state tax enacted from 2026 on that is excluded from the limit (text).

• The Legislative Analyst: “If Proposition 41 receives more ‘yes’ votes than Proposition 40 on this same ballot, then Proposition 40 could be stopped from becoming law even if it gets yes votes from a majority of voters,” because courts could find that the two conflict (printable guide, Proposition 41).
• Proposition 41’s own conflict clause: a measure on the same ballot that contains a state tax excluded from the spending limit is “deemed to be in conflict.” If 41 gets more yes votes, “all the provisions of the other measure shall be null and void” (text, Sec. 5).
• Proposition 40’s conflict clause: it treats as conflicting any measure that taxes billionaires’ net worth, changes those tax rates or directs how that money is used. If 40 gets more yes votes, its provisions prevail and conflicting provisions of the other measure are void (text of Proposition 40, Sec. 8).
• The State Constitution: when two measures approved at the same election conflict, “the provisions of the measure receiving the highest number of affirmative votes shall prevail” (Art. XVIII, Sec. 4).

CalMatters, in a story republished by LAist, summarized it this way: “If Prop. 40 captures more votes than both 41 and 42, the wealth tax takes effect, voiding the countermeasures. If either 41 or 42 outpolls Prop. 40, the billionaire tax does not take effect” (LAist via MSN). Whether Proposition 40’s clause reaches Proposition 41, which does not tax net worth, is a question for courts; we found no official analysis of that case. Proposition 42 is a second measure that could stop Proposition 40 (our Proposition 42 page). See also our Proposition 40 page.

What it means for the City of Los Angeles

• City and County taxes. Proposition 41 does not change them. Its rules apply to “state tax” and to statewide initiative measures (text). The City’s Measure FD and County measures on this ballot are not covered. The local tax measure on this ballot is Proposition 43.
• Proposition 40 money. Proposition 40 would send 90% of its revenue to health care, which the Legislative Analyst describes as mostly Medi-Cal and other state health programs (Legislative Analyst, Proposition 40). If Proposition 41 stops Proposition 40, that money would not be collected. Neither analysis estimates how much would reach Los Angeles.
• Future state special taxes. For state special taxes enacted on or after Jan. 1, 2026, the text requires State Auditor audits of “each program that receives moneys from the special tax” (text, Art. XXIV, Sec. 2). The Legislative Analyst’s analysis does not say whether that includes programs run by cities (Legislative Analyst).

How it got on the ballot

Proposition 41 is a citizen initiative, number 2017 on the Secretary of State’s list (Attorney General file 25-0040A1). The proponent is Kurt R. Oneto (Secretary of State, eligible measures).

• Feb. 11, 2026: The Attorney General issued the circulating title and summary (Secretary of State).
• March 20, 2026: Backers reported 25% of the 874,641 valid signatures needed for a constitutional amendment (Secretary of State). The same day they reported 25% for the companion measure that became Proposition 42 (Secretary of State).
• June 17, 2026: Proposition 40, the billionaire tax, became eligible (Secretary of State).
• June 23, 2026: Proposition 41 became eligible after the county signature sample. Proposition 42 followed on June 24 (Secretary of State). Eligible measures qualify on the 131st day before the election (Secretary of State).

The Yes committee spent $59.4 million from January through Sept. 19, 2026. Its largest payees were PCI Campaigns ($46,248,726) and Amplified Strategies ($8,338,852) (Cal-Access, committee 1488423). Building a Better California, the group funded by Google co-founder Sergey Brin and other investors, designed Propositions 41 and 42 as countermeasures to Proposition 40, CalMatters reported (LAist via MSN).

Related law. Voters approved the state spending limit in 1979 (text, Sec. 2(h); San Diego Union-Tribune). CalMatters reported that recent voter-approved special taxes have exempted themselves from it (LAist via MSN).

What each side says

In the state voter guide. Arguments are the opinions of their authors and are not checked for accuracy by any official agency (arguments and rebuttals).

Argument for, signed by Denise LeDuc Froemming (California Society of Certified Public Accountants), former State Auditor Tom Hayes and Robert Gutierrez (California Taxpayers Association) (argument in favor):

• The State Auditor would audit programs funded by proposed new taxes, before and after the vote, and publish the results.
• The state “will spend more than $350 billion” this year, which the authors call “a 79% increase in spending since 2019.”
• It “doesn’t raise taxes” and requires all taxes to comply with the spending limit, “including its requirement that excess revenues get refunded to taxpayers.”
• Quotes from Pat Fong Kushida of the CalAsian Chamber of Commerce and former Controller Steve Westly.

The rebuttal, signed by Suzanne Jimenez of SEIU-United Healthcare Workers West, calls it “a billionaire-funded smoke screen” meant “to undo the California Billionaire Tax, Prop. 40” (rebuttal).

Argument against, signed by Suzanne Jimenez (argument against):

• It was “designed specifically to undo the California Billionaire Tax, Prop. 40.”
• Sergey Brin “spent over $57 million to fund sham measures like Prop. 41.”

The supporters’ rebuttal, signed by Pat Fong Kushida and Steve Westly, says the state budget is “a record high $352 billion this year” and asks “why would a single, solitary Sacramento special interest oppose transparency and accountability?” (rebuttal).

Outside the guide.

• Steve Westly wrote that the measure would “ensure real accountability for every tax dollar spent” (East Bay Times).
• PPIC pollster Mark Baldassare told CalMatters: “I don’t think that people at this point realize they’re direct countermeasures because there hasn’t been much said about 41 and 42” (LAist via MSN).

Checking the main claims against official records.

Who supports and opposes it

Supporters

• California Society of Certified Public Accountants, CalAsian Chamber of Commerce, California Taxpayers Association, former State Auditor Tom Hayes and former Controller Steve Westly (arguments).
• California Chamber of Commerce (Sacramento Bee via MSN; KQED).
• Sergey Brin (KQED) and Building a Better California, the main funder (Cal-Access, committee 1488423).
• California Republican Party (CAGOP endorsements).
• Reform California, which reported $48,500 in independent spending for it (Cal-Access raw data).

Opponents

• SEIU-United Healthcare Workers West and Senator Bernie Sanders (official ballot label; argument against).
• California Democratic Party (Inland Valley News; KQED).
• California Federation of Labor Unions (KQED).
• ACLU California Action, which listed it in a voter guide (Cal-Access raw data).

Editorial boards.

• Yes: the Southern California News Group, in the Daily News and Orange County Register (Daily News; Orange County Register), and the San Diego Union-Tribune (San Diego Union-Tribune).
• No: the Sacramento Bee, Modesto Bee, Merced Sun-Star, Fresno Bee and San Luis Obispo Tribune (Sacramento Bee via MSN), and the San Francisco Chronicle, which called it “a cynical poison pill” (San Francisco Chronicle).
• We found no LA Times editorial board position on Proposition 41 as of Sept. 30, 2026.

Money for and against

Source: campaign statements of committee 1488423, committee 1484470 and committee 1495036, read from the Cal-Access raw data export dated Sept. 30, 2026. The opposing committees’ money also pays for the Proposition 40 campaign and the campaign against Proposition 42; the filings do not split it by measure. Committee 1484470 paid Kimball Petition Management $19,915,280.70 for petition work. The Secretary of State’s compiled totals ran only through Aug. 2 when checked on Sept. 30.

Who is giving

Method: every itemized contribution on the committees’ Form 460 statements through Sept. 19, 2026, plus late contribution reports through Sept. 29, from the Cal-Access raw data export, analyzed by CityHallPass.

For. Building a Better California gave $58,350,000 of the $58,376,445.92 the Yes committee raised (99.95%), in 13 payments. The rest was $21,807.92 in in-kind help from Reform California, $4,500 from Reform Local Government PAC and one $100 gift (Cal-Access, committee 1488423).

Where Building a Better California’s money comes from (Cal-Access, committee 1486767):

• It reported $226,706,647.98 in itemized contributions from Jan. 1 to Sept. 19, 2026, and $24,537,291.29 more in late reports through Sept. 25. All came from individuals.
• Largest donors on the Form 460s: Sergey Brin ($102,000,000, 45.0%), John Doerr ($30,000,000), Patrick Collison ($22,000,000), Eric Schmidt ($15,141,313.01, plus $11,987,500 in late reports), Vinod Khosla ($12,561,504) and Chris Larsen ($12,511,844.80).
• 42.3% of its money, counting late reports, came from donors with out-of-state addresses. Brin lists a Nevada address.
• It passed money to Yes on 42 ($60.8 million on the Form 460s, and $29 million more in late September), Yes on 41 ($58.35 million), the No on Prop 40 committee ($56.5 million), Yes on 45 ($10 million), Yes on 37 ($6 million) and Yes on Prop 1 ($1 million).

Against. SEIU-United Healthcare Workers West and its committees supplied $31,578,562.91 of the $32,201,797.91 that committee 1484470 received through Sept. 25 (98.1%): $22,067,898.56 from the union’s nonprofit 501(c)(5) committee, $7,510,664.35 from its Political Issues Committee and $2,000,000 from its PAC. Individuals gave $584,385, led by Saikat Chakrabarti ($201,000) and Ross Boucher ($200,000) (Cal-Access, committee 1484470). The smaller Tax the Ultra-Rich Now committee got $250,000 of its $362,225 from Alan Davis (Cal-Access, committee 1495036).

Outside spending

Independent expenditures naming Proposition 41 on Form 496 through Sept. 29 (Cal-Access raw data):

• Supporting: Reform California with Carl DeMaio, ballot measure committee, $48,500 (campaign management, door hangers, slate mailers).
• Opposing: ACLU California Action Issues Committee, $2,200.69 (voter guide).

Independent analysis

• Legislative Analyst. The net fiscal effect “is unknown as it depends on future decisions by voters, the Legislature, and other policymakers.” Under the measure, “the state might not be able to exclude new special tax spending from the limit” (analysis).
• CalMatters. The billionaire tax “would automatically violate this provision because it isn’t written to comply with the state spending limit” (LAist via MSN).
• Sacramento Bee. The first audit would take place after backers collect 25% of the signatures; the auditor would examine spending, oversight and where costs could drop 10% (Sacramento Bee via MSN).

If it passes

• When it starts. A constitutional amendment takes effect on the fifth day after the Secretary of State files the statement of the vote (Art. XVIII, Sec. 4). The text says it is operative the same day and applies to statewide initiative measures submitted to voters on or after Jan. 1, 2026, including those on this ballot (text, Secs. 5 and 7).
• If Proposition 40 also passes. The measure with more yes votes prevails where they conflict (Art. XVIII, Sec. 4). Proposition 41 says that if a conflicting measure that beat it is later struck down, 41 takes full effect (text, Sec. 5(b)).
• Legal defense. If the Governor and Attorney General both decline to defend it in court, the Attorney General must appoint independent counsel, paid from the General Fund (text, Sec. 9).
• Litigation. We found no lawsuit filed as of Sept. 30, 2026. A court dispute over which of Propositions 40, 41 and 42 controls is possible if more than one passes, based on the Legislative Analyst’s warning that courts “could find” a conflict (printable guide).

Key moments

We found no televised debate focused on Proposition 41 as of Sept. 30, 2026.

• Qualification (June 2026). Propositions 40, 41 and 42 became eligible within a week of each other (Secretary of State).
• Polls show voters backing both sides (September 2026). PPIC found majorities for both Proposition 40 and Proposition 41 (PPIC; LAist via MSN).
• Late money (September 2026). Building a Better California reported $24.5 million in late contributions from Sept. 20 to 25, including $11,987,500 from Eric Schmidt. The Yes on 42 committee reported $29 million more from it by Sept. 28 (Cal-Access, committee 1486767; Cal-Access, committee 1488418).

Polls

Source: PPIC Statewide Survey, September 2026; LA Times report on the Berkeley IGS poll and sample size from San Jose Inside. PPIC read respondents the ballot title and label. In PPIC’s poll 52% backed Proposition 40. In the Berkeley poll 45% backed Proposition 40. The Berkeley poll is co-sponsored by the LA Times. We did not find a published margin of error for it.