Asm. Valencia, State Leaders, Announce the Save For California’s Future Act to Strengthen the Rainy Day Fund, Fiscal Responsibility to Protect Future Generations

• Eric Lopez
• Communications Director
• (916) 319-2068
• [email protected]

SACRAMENTO, CA - On Tuesday, the Assembly, Senate and Governor announced the Save For California's Future Act - a constitutional amendment that strengthens the rainy day fund to better prepare for economic uncertainty and protect future generations of Californians. Through this act, California will help protect core programs and safeguard access to critical resources that millions rely on by increasing the cap on the state's rainy day fund. California families understand and expect responsible financial planning - setting aside savings during the good times to prepare for unexpected challenges should they come. The state must continue to operate with the same fiscal prudence.

"As we have learned from past spending and recent budget uncertainties, California should be more mindful during budget surplus years to ensure a savings safety net for future generations of Californians. California's economy is dynamic, but it is also vulnerable. It is high time California updates its fiscal playbook. I look forward to working with my colleagues in the legislature and the administration to get this critical work to the end zone."

-Assemblymember Avelino Valencia (D-Anaheim), Chair of the Assembly Banking & Finance Committee

"Californians live by a simple, bipartisan truth: set money aside when times are good so you're ready when they're not. As California's leaders, we must step up and save more to protect the health care, school and affordable housing programs families count on. The Save For California's Future Act is what responsible leadership looks like - and future taxpayers will thank us for it."

-Speaker of the Assembly Robert Rivas

"Putting money aside to protect ourselves from future uncertainties isn't just good government; it's common sense. California is strong and resilient, but we're not immune to economic headwinds. At a time when our essential services are under pressure, we have a responsibility to safeguard the programs and investments that Californians rely on. I'm grateful for the Legislature's partnership in advancing this proposal to ensure responsible fiscal stewardship in the face of future uncertainty."

-Governor Gavin Newsom

"The Rainy Day Fund is critical to the annual California State Budget and helps mitigate cuts to state programs in difficult budget years. California has faced tough decisions, requiring legislators to dip into the fund to help fill the gaps - but there is more work to be done. Boosting the Rainy Day Fund will continue to provide a needed reserve for future years and protect programs that working families need."

-Senate President pro Tempore Monique Limón

"Even as we navigate our current budget challenges, we must take steps to build a stronger financial foundation for future generations. By strengthening California's Rainy Day Fund, we can protect funding for schools and essential public services, better weather future economic downturns, and leave our children a stronger, more resilient California. This proposal is an investment in California's future and a commitment to responsible stewardship for future generations."

-Assemblymember Jesse Gabriel (D-Encino), Chair of the Assembly Budget Committee and author of ACA 20

"California's revenues are volatile, and we know that strong years don't last forever. This proposal would strengthen the Rainy Day Fund by increasing reserves, capturing more revenue during boom years, and helping the state pay down long-term obligations. The idea is to save more during good times so we're better prepared during difficult times. That's how we protect essential services and maintain long-term fiscal stability."

-Senator John Laird (D-Santa Cruz)

"Families across the Central Valley understand what it means to stretch every dollar and prepare for uncertainty. The state must continue to do the same. I am proud to serve as an author on this measure to strengthen California's Rainy Day Fund. This is a responsible action to protect taxpayers, safeguard essential services, and ensure we are not forced into deeper cuts when revenues decline, or costs are shifted in Washington. Expanding California's reserves recognizes that fiscal responsibility and protecting working families must go hand in hand. Taking this important step gives California a stronger backstop for schools, health care, public safety, wildfire response, and countless other programs our communities rely on."

-Senator Melissa Hurtado (D-Bakersfield)

The Save for California's Future Act will deliver greater stability for California taxpayers by creating a stronger financial foundation - one that better prepares for uncertainty and helps preserve the services, programs and benefits that families rely on most.

The Legislature is scheduled to vote on the Save For California's Future Act on Thursday, June 25.

While the state's economy is among the largest and most dynamic in the world, it is also subject to the same economic cycles and fluctuations in revenue experienced by every nation. Natural disasters, public health emergencies and other unforeseen events can place significant strain on the state budget.

When state revenues decline during economic downturns, insufficient reserves can force difficult choices that disrupt the essential programs and services that California families, workers and businesses need to survive.

Building and maintaining strong budget reserves during periods of economic growth is not just the right thing to do: It protects Californians from sudden reductions in essential services and mitigates the need for drastic corrective actions during periods of fiscal stress.

Just like families save for emergencies and unexpected expenses, California should save during good years to protect schools, public safety and vital programs.

The Save For California's Future Act would:

• Increase the constitutional cap on California's main rainy day fund, from 10% to 20%

• Fully protect guaranteed funding for California's public schools

• Increase the amount saved in the rainy day fund during years when taxes generated by capital gains and other asset-related income reach especially high levels

• Extends the requirement that certain funds be dedicated to paying down state liabilities and expands the types of liabilities that can be paid down, including for schools and federal Unemployment Insurance loans.

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Assemblymember Valencia proudly represents the 68th Assembly district which includes the cities of Anaheim, Orange and Santa Ana. Valencia chairs the Assembly Banking & Finance Committee and the Select Committee on Developing Pathways to Purpose for Young Men.