Prop 16 was a repeal of a previous amendment to the state constitution that effectively banned Affirmative Action in the state for public positions.
Basically, if Prop 16 passed, various public sector jobs would be able to consider race/sex/whatever when looking to hire.
That's technically a double-edged sword. As while it allows for things like Affirmative Action, it also allows for discrimination based on those attributes as well.
So I can see a perfectly reasonable reason while progressives would also be wary about passing Prop 16.