Contest 2 of 14
Ballot order #2
Proposition 2
Increases State's Rainy Day Fund. Legislative Constitutional Amendment.
Fiscal Impact
No dollar figure in the LAO estimate — it says state reserves would be higher
Short Term
State spends
State saves
LAO gives no net dollar estimate.
Long Term
State spends
State saves
LAO gives no net dollar estimate — the state would save more into its rainy-day fund, and may make extra debt payments through 2040.
Social Impact
- The measure doubles the Rainy Day Fund cap from 10% to 20% of General Fund revenues and requires additional savings in years when tax revenues are high.
- The measure requires extra debt payments through 2040, and those payments could also cover required school payments, borrowing from other state funds, and certain federal loans.
- Supporters say larger reserves will keep funding for schools, health care, and public safety in place during economic downturns.
- Opponents say the change will make taxpayer rebates less likely by moving revenue into reserves that do not count toward the spending limit.
A YES vote means:
The state must put more money into its rainy day fund, and it must keep making extra payments on state debts for longer.
A NO vote means:
The current rules for building state savings and making extra debt payments stay the same.
No argument against this measure was submitted to the official voter guide.
Cost (Legislative Analyst): State budget reserves would be higher.
Source: CA Secretary of State, Official Voter Information Guide