Proposition 2: Rainy day fundLets the state save more in its emergency reserve
Read the full text of the measure: Official Voter Information Guide (PDF)
In plain words
The "rainy day fund" is money the state saves in good years to use in bad years. Today the state can save up to 10% of its main tax money there. This raises the limit to 20%, makes the state save more in years when stock-market gains bring in extra tax money, and keeps required extra debt payments going 10 more years. Money put in savings would not count against the state's spending limit until it is taken out. (sos.ca.gov (Official Voter Information Guide) )
Before and after
| Question | Today | If it passes |
|---|---|---|
| Most the rainy day fund can hold | 10% of main (General Fund) tax money | 20% |
| Required extra payments on state debts | End in 2030 | Continue to 2040 |
| Do savings count against the state spending limit? | Yes | No, until the money is taken out (capped at 10% of General Fund taxes) |
| State reserves today | About $20 billion | Would be higher over time |
Numbers from the official ballot title (ballot title ); also see (sos.ca.gov (Official Voter Information Guide) )
Example
Illustration only: the state's main budget spends about $250 billion a year. 10% of that is about $25 billion; 20% is about $50 billion. (sos.ca.gov (Official Voter Information Guide) )
Biggest change
- Raises the rainy day fund cap from 10% to 20% of General Fund revenue and requires bigger deposits in years with high capital gains (stock-market profits). source: sos.ca.gov (Official Voter Information Guide)
- Money put into reserves would not count toward the state spending limit until withdrawn. Opponents say this can make taxpayer rebates less likely. source: sos.ca.gov (Official Voter Information Guide)
Who it affects most: Everyone who depends on state programs such as schools and health care in a downturn; and taxpayers, because opponents say it makes taxpayer rebates under the spending limit less likely.
Cost to the state: State budget reserves would be higher, and the state might make more debt payments, according to the Legislative Analyst. No direct new cost.
Our plain-words summary. Every line points to its source.
What your vote means
The state's rainy day fund can grow to 20% of its main tax money instead of 10%, and extra debt payments continue to 2040.
The rainy day fund stays capped at 10%, and the extra debt payments end in 2030.
Our one-line summary. The official "What your vote means" statements are in the Secretary of State's Official Voter Information Guide, linked below.
Why people want it, and why others object
Why this is on the ballot
The Legislature put this on the ballot. It changes the state constitution, so only another statewide vote can change it back. It passes with a simple majority.
- The Legislature placed it on the ballot. It passed the Senate 29 to 2 and the Assembly 59 to 8. source: sos.ca.gov (Official Voter Information Guide)
- CalMatters reports the measure also lets some tax money pay down California's roughly $20 billion federal unemployment insurance debt, and that supporters point to how much state tax money depends on the stock market. source: CalMatters
Touches the state's tax-limit rules: California's spending limit and local tax votes, in plain words, explained.
Why supporters want it
- Official argument in favor: "Vote yes on Proposition 2 to protect schools, healthcare, and public safety funding." Signed by Darrell Roberts (California Professional Firefighters), Assemblymember Jesse Gabriel (Assembly Budget Committee chair) and Maria S. Salinas (Los Angeles Area Chamber of Commerce). source: sos.ca.gov (Official Voter Information Guide)
Why opponents object
- Official argument against: "Proposition 2 guarantees more spending, not savings, creating a loophole that makes taxpayer rebates less likely" Opponents call it a "slush fund." Signed by Assemblymember David Tangipa, Steven Choi and Carl DeMaio (Reform California). source: sos.ca.gov (Official Voter Information Guide)
Who backs each side
- For: Gov. Gavin Newsom, Xavier Becerra, Assemblymember Jesse Gabriel, CA Professional Firefighters, LA Chamber of Commerce and legislative Democrats. Against: Reform California and legislative Republicans. source: CalMatters
- Money: the Secretary of State listed no committees for or against as of Oct. 6, 2026. source: sos.ca.gov (Secretary of State)
In each side's own words where we could find them, quoted or summarized with a link to the source. We don't endorse either side.
What you will see on your ballot
Official ballot wording, word for word (tap to open)
The official ballot title, word for word from the Secretary of State's Official Voter Information Guide .
INCREASES STATE’S RAINY DAY FUND. LEGISLATIVE CONSTITUTIONAL AMENDMENT.
YES
NO
Official title copied word for word from the Official Voter Information Guide (page 20). The title and summary are prepared by the Attorney General.
Official summary by the Attorney General (tap to open)
Increases California’s Rainy Day Fund, approved by voters in 2014, to provide funding for education, health care, public safety, and other essential services during economic downturns. Doubles the budget reserve cap from 10% to 20% of General Fund revenues, requiring savings until Fund’s balance equals 20% of General Fund. Requires additional savings in years when tax revenues are high. Increases budget reserves available for education, state debts, and pension obligations.(sos.ca.gov (Official Voter Information Guide) )
Latest news
Recent reporting from a range of outlets, newest first. We link to it; we don't endorse it.
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Full text of the measure
The full text of the proposed law is printed in the Official Voter Information Guide. Read it in the Official Voter Information Guide (PDF) , or on the Legislature's page for Assembly Constitutional Amendment 20 (Gabriel), Resolution Chapter 130, Statutes of 2026 , which also shows the votes in each chamber.
Read more
- Secretary of State: Official Voter Information Guide, Nov. 3, 2026 (PDF)
- Official Voter Information Guide: Proposition 2
- Official arguments and rebuttals
- Legislative Analyst's analysis
We link to analysis from several sources; we don't endorse it.