2Bigger rainy day fund and extended extra debt payments

#Key findings

• The 2014 rainy day fund peaked near $23B, then the state pulled about $12.2B in 2024–25 and 2025–26 and suspended deposits. It fell to $11.5B, with $15.1B projected for 2026–27. ^[1]
• The 10% cap only actually bound in 2 years (2022–23 and 2023–24). Without the cap, about $2B more would have been saved. ^[1][2]
• The LAO estimates revenue losses in each of the last three recessions were about 50% of a year's General Fund taxes, far more than the current cap. Even a 20% cap (~$42B) covers less than half of that. ^[1]
• No campaign on either side. Nobody is spending money for or against it. ^[3]

#Track record

#Money and conflicts

• No committees on either side. The main beneficiary is the state budget itself.
• The trade-off is real: money that's saved isn't spent, and leaving deposits out of the spending limit lowers the odds of taxpayer rebates (the critics' "slush fund" argument).

#Does it solve a lasting problem?

• Yes, it targets a real structural problem: very volatile revenue. The recent record shows the limit is discipline, not size. Lawmakers suspended deposits and drew the fund down in two straight years, and a bigger cap doesn't stop that.

#If you vote yes: accountability

Bottom line: A bigger cap only helps if leaders actually make the deposits and don't drain the fund early. The rules for tapping it don't change. ^[1]

#Who decides

• The Governor can declare a "budget emergency," but only after a disaster or when there isn't enough money to keep spending at the highest level of the last three years (adjusted for population and inflation). The Legislature then needs a majority vote to withdraw money. In the first year of an emergency, it can take no more than half the fund. ^[5]
• The Department of Finance writes the budget numbers the deposits are based on. Its director is Joe Stephenshaw. ^[6]
• The LAO is the Legislature's nonpartisan budget office and tracks the fund's balance every year. ^[1]

#What to watch

• Lawmakers took about $12.2B out in 2024–25 and 2025–26 and suspended deposits. ^[2] If Prop 2 passes, watch whether the next budget (due June 15, 2027) puts the fund back on a path toward 20%, or declares another emergency.
• Prop 2 widens what the extra debt payments can be used for, adding school payments and repaying internal loans. ^[1] Watch whether the money keeps going to pension and retiree-health debt, or gets used to patch the budget.

#Who to press, and what to ask for

• The next governor (Becerra or Hilton): will they commit to no budget-emergency withdrawals outside a recession?
• Your Assemblymember and state Senator (findyourrep.legislature.ca.gov): ask them to require a public multiyear plan for rebuilding the fund before any emergency withdrawal is approved.

#Public records to request (CPRA)

Anyone can file a California Public Records Act request (the state's version of FOIA), with no reason required. Agencies must respond within 10 days, or 24 in unusual cases. ^[7]

To the Department of Finance: Under the California Public Records Act (Gov. Code § 7920.000 et seq.), I request the worksheets showing how the required Budget Stabilization Account deposits and extra debt payments under Article XVI, Section 20 were calculated for fiscal years 2024–25 through 2026–27, and any records supporting the budget emergency declarations for those years.