California Proposition 2
A constitutional amendment that would raise the cap on how much the state can deposit into its Rainy Day Fund, from 10% to 20% of general fund tax revenue. These deposits would not count toward the state’s constitutional spending limit. It would also let the state use some tax revenue to pay down California’s $20 billion federal unemployment insurance debt.
A “yes” vote would support raising the reserve cap.
A “no” vote would keep the current rules.
What would it cost?
No direct new cost; state budget reserves would simply be allowed to grow larger.Support
Supporters include: Gov. Gavin Newsom, California Democratic Party, legislative Democrats, California Professional Firefighters, LA Chamber of Commerce.Supporters argue California’s tax revenue is volatile, and raising the ceiling lets the state save more during good years to cushion future downturns.Opposition
Opponents include: Reform California, legislative Republicans.Opponents argue the reserves can become a “slush fund” for politicians, and that excluding these deposits from the spending limit means fewer taxpayer refunds.