Californians will vote on Proposition 2 in November. The measure would expand the state’s Rainy Day Fund.
A little over a decade ago, California voters approved the creation of a Rainy Day Fund.
The idea was to have a financial safety net for services like education, health care, and public safety during economic downturns.
Right now, the state can set aside up to 10% of tax revenue for that fund. A “yes” vote for Prop. 2 would raise that limit to 20%.
The state gets more income tax revenue when Californians are doing well in the stock market, and supporters say raising the ceiling would allow the government to save more money when the economy is booming.
Opponents point out state lawmakers can tap into that money whenever the governor declares a budget emergency, and worry the reserve could be used as a “slush fund.” They say they would rather see the state rein in spending during hard times.