SACRAMENTO - The Legislature today unanimously passed Assembly Constitutional Amendment 1 (Second Extraordinary Session), which replaces the current Rainy Day Fund on the November 2014 ballot. The measure reflects the bipartisan agreement reached by Governor Brown and Legislative Leaders last week.
"A real Rainy Day Fund to end the cycle of boom and bust has been one of the cornerstones of the Assembly's efforts to ensure California's fiscal stability," said Speaker Toni G. Atkins (D-San Diego). "The unanimous vote for our Rainy Day Fund shows just how solid our plan is and I thank Speaker Emeritus John A. Pérez for his leadership in making the Rainy Day Fund a reality."
The author of the legislation, Speaker Emeritus Pérez, was pleased with the bipartisan efforts made to bring additional fiscal responsibility to California.
"This is a strong proposal for the voters to consider, and I am very proud of the work we have done on a bipartisan basis to take another monumental step forward in making California a model for fiscal responsibility across the country," said Speaker Emeritus Pérez (D-Los Angeles). "By putting a genuine Rainy Day Fund before the voters, we can break the bad habits of the past where we overspend in good years and overcut in tough years, and this measure will ensure that we maintain the health of California's finances in the years to come."
The proposal works to achieve budget stability by targeting revenue volatility. The Rainy Day Fund will:
- Double the size of the Reserve from 5% to 10% of the General Fund.
- Take 1.5 percent of the General Fund and any revenues from capital gains that spike higher than 8% of the overall General Fund off the table.
- Create a dedicated funding source to repay debt for the next 15 years.
- Maintain the Prop 98 Reserve as proposed by the Governor.
The Rainy Day Fund proposal will replace the current standing Prop 58 Constitutional Reserve as well as the ACA 4 ballot measure to be placed before voters in November.
Speaker Emeritus Pérez presents ACA 1 on the floor of the State Assembly. (3:34)
Speaker Emeritus Pérez says ACA 1 will stabilize the state’s revenues and build up reserves. (:09)
Speaker Emeritus Pérez says we’ve made the tough decisions needed to put California’s fiscal house in order. (:19)
Speaker Emeritus Pérez says ACA 1 is the next step to ensuring California’s fiscal future. (:24)
CONTACT: Will Shuck (916) 319-2408