California Voters to Decide on Rainy Day Fund Measure

The November 2026 ballot includes Measure 2, which proposes raising the state Rainy Day Fund cap to 20% of the general fund.

Updated on Oct. 15, 2026 in Elections

California Voters to Decide on Rainy Day Fund Measure

Live Poll

Should your state government prioritize building larger financial reserves over issuing tax refunds to residents?

California voters will decide on 13 state measures during the November 2026 election, including a proposal to increase the state budget reserve cap. Measure 2 aims to raise the Rainy Day Fund limit from the current 10% to 20% of the general fund.

Why it matters

Proponents argue that doubling the reserve ceiling will provide stronger economic protection during downturns, while opponents worry lawmakers could use the measure to hold back tax revenue meant for refunds. The proposal also seeks to extend state debt payments until 2040.

California currently holds more than $250 billion in debts and requires an annual deposit of 0.75% of general fund tax revenues into its stabilization account. Measure 2 would also exclude surge revenue account deposits from the state appropriations limit.

The players

California

This is the U.S. state where the upcoming election and ballot measures will be decided by voters.

Los Angeles County

This is the most populous county in the nation and the site of two specific local measures appearing on the November ballot.

The details

If approved, the measure requires additional debt payments through 2040, extending the current 2030 deadline. Voters will also consider two local measures in Los Angeles County alongside the 13 statewide initiatives.

November 2026: The California election occurs.
2030: The current deadline for extra state debt payments.
2040: The proposed deadline for extra state debt payments.

Political Context

Opponents argue that the proposed changes to the state appropriations limit could provide a pathway for lawmakers to withhold tax revenue. They contend that this structural change may prevent taxpayers from receiving legally mandated refunds during surplus periods.

The passage of Measure 2 would adjust how the state manages its fiscal reserves and debt repayment obligations until 2040. Residents may see changes in how budget surpluses are allocated, potentially impacting future tax refund availability.

The takeaway

Voters face a choice between prioritizing larger long-term budget reserves or maintaining current revenue return structures. The decision will impact the state's fiscal strategy for over a decade.