California
Prop 2Increases State’s Rainy Day Fund
What your vote does
A YES vote means
Rainy day fund deposits continue until 20% of General Fund taxes (not 10%) and skip the spending limit until withdrawn. Extra debt payments through 2040. 3
A NO vote means
Rainy day fund deposits continue until 10% of General Fund taxes and count toward the spending limit. Extra debt payments become optional after 2030. 3
Both ovals are empty on purpose. The choice is yours.
Increases State’s Rainy Day Fund. Legislative Constitutional Amendment. 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. Fiscal Impact: State budget reserves would be higher. Supporters: CA Professional Firefighters; LA Chamber of Commerce; Gavin Newsom; Xavier Becerra; Assemblymember Jesse Gabriel Opponents: None submitted
This is the exact wording from the official voter guide.
If it fails
Nothing changes if it fails
If Prop 2 fails, current rules stay. Required deposits stop once the rainy day fund reaches 10 percent of General Fund taxes, and that money must then be spent on infrastructure. The extra debt payment requirement ends in 2030. 3
Why it’s on the ballot now
Voters created the current rainy day fund rules in 2014. Today, required deposits stop once the fund reaches 10% of General Fund taxes. 23
The Legislative Analyst's analysis in the voter guide for this election says the state has about $20 billion in reserves that can be used for any public program. This year, the state plans to spend about $250 billion from its General Fund. 3
State revenues swing widely. The LAO says a bad recession or market crash can cut them, over a few years, by 50% or more of a year's General Fund revenues. 3
The current rule requiring extra payments on state pension and retiree health debts ends in 2030. 3
In a budget emergency, the state can already stop making rainy day fund deposits or take money out of the fund. 3
The money
Prop 2 saves more revenue in good years instead of spending it. The LAO says reserves would be higher, making budgets somewhat easier to balance when revenues fall, and debt payments might increase. The money set aside for extra debt payments could also cover required payments to schools and community colleges, loans from other state funds and some federal loans. See the money chart for the latest filed totals. 3
- Amount
- Savings cap rises from 10% to 20% of General Fund taxes
- How long
- Ongoing from the 2027–28 budget year; extra debt payments through 2040
- Who pays
- The state saves money in good years instead of spending it on public programs. Deposits would not count toward the state spending limit (a constitutional cap on how much tax revenue the state can spend) until taken out. The same would apply to a separate account for surging revenues, up to 10% of General Fund taxes a year. Opponents say this makes tax rebates, which they say the Constitution requires when revenues exceed the limit, less likely. Supporters say that rebate is theoretical and rests on an old accounting rule that rewards spending instead of saving. 34
Who bears the cost
State government (the General Fund)
What they already pay
- Under current law, the State Constitution requires the state to deposit 0.75 percent of General Fund tax revenues into the rainy day fund each year. Deposits are not required once the fund reaches 10 percent, and in a budget emergency the state can stop them. 3
If it passes
- The Legislative Analyst (LAO) says Prop 2 requires deposits until the fund reaches 20 percent of General Fund taxes, instead of 10 percent. The LAO says it would also require larger deposits in years when investment-gain tax revenue is very high. 3
- The LAO says budget reserves would be higher, making budgets somewhat easier to balance when revenues decline. Money saved goes to reserves instead of public programs. The state might also make more debt payments. 3
Who’s behind it
How it got on the ballot: State Legislature
The Legislature put it on the ballot. It passed Assembly Constitutional Amendment 20 (ACA 20), a plan to change the state constitution. The vote was 29 to 2 in the Senate and 59 to 8 in the Assembly. 215
Where the support comes from
Placed by who endorsed it and who funded it, not by our opinion. How we place measures
The California Democratic Party recommends Yes on Prop 2, while the California Republican Party and the Howard Jarvis Taxpayers Association, a taxpayer group, recommend No. SPUR and the League of Women Voters of California, both good-government groups, also support it, while the San Francisco Green Party opposes it. No committee supporting or opposing Prop 2 has reported contributions. 891061171213
Endorsements
| Group | YES | NO | Neutral |
|---|---|---|---|
| Progressive slate | |||
| San Francisco League of Pissed Off Voters | No position | ||
| Harvey Milk LGBTQ Democratic Club | Yes | ||
| Moderate slate | |||
| GrowSF | Yes | ||
| Political parties | |||
| San Francisco Democratic Party | Yes | ||
| San Francisco Green Party | No | ||
| California Democratic Party | Yes | ||
| California Republican Party | No | ||
| Other groups | |||
| SPUR | Yes | ||
| San Francisco Women's Political Committee | Yes | ||
| Alice B. Toklas LGBTQ Democratic Club | Yes | ||
| Edwin M. Lee Asian Pacific Democratic Club | Yes | ||
| Howard Jarvis Taxpayers Association | No | ||
| League of Women Voters of California | Yes | ||
Follow the money
No campaign committees have reported raising money for or against this measure.
The strongest case for and against
Each side’s best argument, written as its supporters would make it. Neither is our view.
Strongest case for
Supporters include the California Professional Firefighters, the Los Angeles Area Chamber of Commerce and Assembly Budget Chair Jesse Gabriel. They say the budget swings from boom to bust. They say it went from a $100 billion surplus to a $50 billion deficit in a few years. They say raising the reserve requirement from 10 to 20% gives the state a real cushion. They say that way, schools, health care and public safety are not first in line for cuts. They say it saves more when tax revenues spike, instead of funding ongoing spending the state can't sustain. They say the rebate opponents describe is theoretical. They say Republicans and Democrats in the Legislature back it. They also say the LAO has recommended saving significantly more than current rules require. 4
Strongest case against
Opponents include Assembly Budget Vice Chair David Tangipa, Senate Elections Vice Chair Steven Choi and Carl DeMaio of Reform California. They say Prop 2 weakens the spending limit voters approved in 1978. They say moving billions into reserves that no longer count toward the limit makes tax rebates less likely. They say those rebates are owed when revenues exceed the limit. They say it does not guarantee any new money for health care, education or public safety. They say that within 24 hours of introducing the measure, many of the same politicians who praised it supported legislation to suspend more than $5 billion in required deposits. They argue the state needs to follow its existing rules, not a new tool. They argue Prop 2 makes the budget more volatile. 4
Sources
Every fact on this page links to one of these sources.
- Ballot label: title (table of contents) and summary (Quick Reference Guide), Proposition 2 (en edition), CA Official Voter Information Guide, Nov 3, 2026, p. 3, 5
- Proposition 2: Official Title and Summary (prepared by the Attorney General), CA Official Voter Information Guide, Nov 3, 2026, p. 1
- Proposition 2: Analysis by the Legislative Analyst, CA Official Voter Information Guide, Nov 3, 2026, p. 1-4
- Proposition 2: Arguments and rebuttals, CA Official Voter Information Guide, Nov 3, 2026, p. 5-6
- Proposition 2: Text of Proposed Law, CA Official Voter Information Guide, Nov 3, 2026, p. 1-4
- SPUR: recommendations for the November 3, 2026 election
- San Francisco Green Party: recommendations for the November 3, 2026 election
- California Democratic Party: recommendations for the November 3, 2026 election
- California Republican Party: recommendations for the November 3, 2026 election
- Howard Jarvis Taxpayers Association: recommendations for the November 3, 2026 election
- League of Women Voters of California: recommendations for the November 3, 2026 election
- How endorsers line up on Prop 2: this guide's coalition groupings (endorsement method 1.0, data as of 2026-10-27)
- Campaign finance filings as of 2026-10-28 (compiled by this guide from CA Secretary of State: Proposition 2 contribution totals; data/money/ca-2026-11-p2.json, main@0dcbec8)